Sumitomo, Nissho Iwai form new LNG firm

Japan?s trading powerhouses Nissho Iwai Corp and Sumitomo Corp have formed a new liquefied natural gas company (LNG), LNG Japan Corp, with operations set to begin Oct 1, 2001, Nissho Iwai said Friday.

The formation of LNG Japan Corp follows the two companies' decision in June to form a fifty-fifty joint venture for participation in overseas LNG business.

Sumitomo would invest in the new company by acquiring 50 percent of its shares at the end of September. Headquartered in Tokyo, LNG Japan's chairman will be named by Sumitomo Corp. Nissho Iwai's Kenichi Yonezawa has been appointed president of LNG Japan.

Meanwhile, Nissho Iwai said it has decided to transfer its LNG business to LNG Japan, in order to improve future profitability and aggressively exploit potential business opportunities. The asset transfer, amounting to Yen 53.0-billion, will be effective Aug 31.

Afterwards, Nissho Iwai would transfer a 50 percent share of LNG Japan to Sumitomo Corp.

Nissho Iwai holds a 3 percent stake in Qatar's RasGas LNG Company and a 5 percent concession right in Indonesia's Tangguh gas fields in Irian Jaya, where a LNG project is planned.

The firm said it has realized the difficulty in obtaining greater stakes in global fields by itself. The move would also allow Sumitomo to enter the LNG business.(*)