Tokyo Gas buys stake at Sulawesi power, gas projects

ASX-listed firm Energy World Corporation Ltd. (EWC) has on Wednesday signed a heads of agreement (HOA) with Tokyo Gas Co. Ltd. for 25% equity investment by Tokyo Gas in EWC?s three main projects in Sengkang, South Sulawesi.

The projects are: 1. Operation and expansion of existing gas-fired power generation; 2. Natural gas production activities from the Sengkang PSC Block and 3. Construction and operation of mid-scale modular LNG liquefaction facility for a final capacity of 2 million tonnes per annum; and an LNG marketing company (to be established).

The HOA provide for an exclusive discussion of 0.5 million tonnes per annum LNG offtake by Tokyo Gas after commencement of the LNG operations in Sengkang. This offtake volume takes into consideration the project?s intention to make the rest of its 1.5 million tonnes per annum capacity available to potential domestic demands.

EWC and Tokyo Gas will now commence negotiation in view to execute definitive agreements for Tokyo Gas? equity investment and LNG offtake. The sale of LNG to Tokyo Gas will be subject to obtaining all necessary Indonesian Government and regulatory approvals.

The heads of agreement also provide for Tokyo Gas to have first right of refusal to invest in other gas, LNG and power projects developed by EWC in South East Asia.

Due to confidentiality, EWC cannot make any further comments to shareholders in connection with the HOA, the Company said. However, Stewart Elliott - Chairman and CEO of EWC commented as follows: ?I believe this potential arrangement with Tokyo Gas re-enforces the future viability of our investments in Sengkang Indonesia. It further demonstrates that our mid-scale modular LNG liquefaction facility is supported by one of the world?s major pre-eminent forward thinking and leading LNG industry players. This will prove a further major development in bringing LNG to the Asian market.?(kanti)