Mitsubishi to sell part of Tangguh LNG project stake

Mitsubishi Corp., Japan's biggest buyer of liquefied natural gas (LNG) said it would sell part of its 16 percent stake in the $2.5 billion Tangguh gas project in Irian Jaya, without disclosing the buyer or the sale amount, Bloomberg reported Thursday.

He declined to comment on a Nihon Keizai newspaper report that said Inpex Corp., a unit of state-run Japan National Oil Corp., would buy 44 percent of Mitsubishi's stake in Tangguh in Irian Jaya for 26 billion yen ($213 million).

The two companies aims to export the first shipment of LNG from the project to Japan, China and South Korea as early as 2005, the newspaper said. Selling a stake to Inpex will spread the risk for Mitsubishi and give Inpex another profit source, the report said.

Tangguh will be Indonesia's third LNG project, with 14.4 trillion cubic feet of proven gas reserves. BP Plc, the No. 3 publicly traded oil company, owns 50 percent of the project, which will pump gas from offshore fields to a plant that will turn the gas into liquid to be shipped to markets in Asia.

In July, Mitsubishi bought Occidental Berau of Indonesia LLC; a unit of US based Occidental Petroleum Corp to gain 16 percent of the reserves in Tangguh.

Tangguh, covering three areas - Berau, Muturi and Wirigar, is located in the northwest part of Irian Jaya. Mitsubishi has a stake in the Berau block.(*)