Reuters: Global Markets: Japan's Mitsui, Mitsubishi to buy Australia LNG stake for $2 billion

Reuters: Global Markets Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com

Japan's Mitsui, Mitsubishi to buy Australia LNG stake for $2 billion May 1st 2012, 00:27 Security guards work at the headquarters of Mitsubishi Corp in Tokyo July 7, 2009. Credit: Reuters/Stringer SYDNEY | Mon Apr 30, 2012 9:01pm EDT SYDNEY (Reuters) - Japan's Mitsui & Co (8031.T) and Mitsubishi Corp (8058.T) will jointly buy a 14.7 percent stake in an Australian LNG project from Woodside Petroleum (WPL.AX) for $2 billion, underscoring Japan's demand for gas in the face of a drastically reduced nuclear power generating capacity. The announcement of the deal in a Australian Securities Exchange filing sent Woodside shares up more than 4 percent to a near two month high. By 0030 GMT, the shares were trading 4.1 percent higher at A$36.33 ($37.82). The two firms agreed to buy the Woodside stake through a company called Japan Australia LNG (MIMI Browse)Pty Ltd that would give them a 16 interest in Woodside's East Browse and 8.1 percent in West Browse ventures. They also agreed to take 1.5 million tonnes of gas a year from the project, and offered Woodside help with getting competitive finance from Japanese banks for the Browse project, estimated by analysts as likely to cost around A$30 billion ($31 billion). Woodside said its stake in the project will fall to 31.3 percent from 46 percent. It will remain the operator of the project. "The level of interest shown during this process reflects the strong ongoing demand for LNG from premium developments such as this," Woodside Chief Executive Peter Coleman said in the statement. Japan, the world's largest liquefied natural gas (LNG) importer, is racing to secure gas supplies as LNG substitutes lost nuclear capacity. Japan's nuclear capacity, which previously accounted for about a third of the country's electricity production, has slowly been taken offline since the Fukushima crisis last year triggered nuclear safety concerns. Japanese firms have stakes in at least five other Australian LNG projects, and are said to be eyeing the stake sale in BG's (BG.L) Curtis gas project. Australia has $200 billion of proposed liquefied natural gas export projects with plans to add more than 80 million tonnes per annum (mtpa) of LNG production before the end of the decade to become the world's leading LNG exporter, surpassing Qatar. A deal would finalize the auction process Woodside announced in January after receiving approaches from several companies and allows Woodside to extract early value from the project. It also adds some certainty to project that has been dogged by a dispute among the its partners --Shell (RDSa.L), BP (BP.L), Chevron (CVX.N), and BHP Billiton (BHP.AX)(BLT.L) -- over the best location to process the gas. There is also mounting external opposition to building a gas processing plant at James Price Point, which is favored by Woodside. Last month, Australia gave partners in the Browse project off its western coast more time to reach a final investment decision, as attempts are made to end in-fighting and quell opposition from environmentalists and landowners. ($1 = 0.9606 Australian dollars) (Reporting by Narayanan Somasundaram; Editing by Lincoln Feast and Eric Meijer) Link this Share this Digg this Email Reprints

You are receiving this email because you subscribed to this feed at blogtrottr.com. If you no longer wish to receive these emails, you can unsubscribe from this feed, or manage all your subscriptions