Nissho Iwai to take over BG ownership in Tangguh LNG project

Nissho Iwai Corporation, one of Japanese Liquefied Natural Gas importers, plans to increase its ownership in the Tangguh LNG project by acquiring British Gas?s stake, Bisnis Indonesia reported on Tuesday.

?Negotiation is still underway and we hope the acquisition of British Gas?s share could be completed by the end of this year,? Senior managing director of Nissho Iwai Corp, Takaharu Tanabe was quoted as saying.

At present, Nissho Iwai has 1.1% of the Tangguh LNG project and British Gas owns 10.8 percent, The 50 percent of the shares are held by BP Plc, 16 percent by Mitsubishi Corporation, 12 percent by Nippon Oil and 10 percent by Kanematsu.

Tanabe, however, did not explain whether Nissho Iwai planned to take over all of British Gas?s ownership, or only part of them.

Nissho Iwai imports about 15 million metric tons of LNG from Indonesia a year, more than a quarter of Japan?s total LNG imports.

Analysts estimate that Nissho?s plan to take over BG?s shares in the Tangguh project is part of its strategy to secure its more gas import from Indonesia in the future.

Last month, Mitsubishi Corporation acquired Occidental Petroleum?s stake in the Tangguh project for US$480 million. This raises its stake to 16 percent, the second largest after BP Plc which has 50 percent.

The Tangguh LNG project, which is located in Irian Jaya, is now under preparation for construction. The project which will absorb about $3 billion in investment is expected to start production by 2005. Pertamina is still negotiating on the sale of the Tangguh LNG to China. (*)