Korea Gas to buy stake in Indonesian gas field from Mitsubishi

Korea Gas agreed to buy about half of Mitsubishi Corp.’s 20% stake in Senoro-Toili natural gas field in Indonesia’s Central Sulawesi province, Mitsubishi said.

 Terms call for Mitsubishi to receive about 10 billion yen for the 9.8% stake in the field, which has reserves estimated at 2 tcf. Production from the field, which is 80% owned by Indonesia’s state-owned PT Pertamina, is expected to begin in 2014.

The output will be supplied mainly to PT Donggi-Senoro LNG, a joint venture owned by PT Pertamina Hulu Energi with 29% interest, PT Medco LNG Indonesia, 11.1%, and Sulawesi LNG Development Ltd., 59.9%. The JV plans to build a gas liquefaction plant in Central Sulawesi.

The plant is expected to begin supplying LNG in the second half of 2014. The agreement between Mitsubishi and Korea Gas comes as Japanese imports of LNG are on the rise, while oil imports are down following the country’s 2011 earthquake and resulting nuclear disaster.

Data released by Japan’s ministry of finance showed that the country’s crude oil imports dropped by 8.9% on year in November, while LNG saw a 21% rise during the same month.

 Analysts said the figures demonstrate that crude oil is losing out to LNG in meeting Japan’s rising power demand amid continued nuclear power outage.

"LNG will keep its importance" as a fuel to replace nuclear power given its relatively smaller carbon dioxide emissions and stable supply, according to analyst Ken Koyama of Japan’s Institute of Energy Economics.

Japan’s ministry of finance said that the country’s imports of crude oil and condensate fell 8.9% in November to 17.16 million kiloliters, or 3.6 million b/d.

But the country’s imports of LNG have soared since the nuclear meltdown in March, marking 7 months in a row of double-digit on-year growth. In November, Japan imported 7 million tonnes of LNG.

Contact Eric Watkins at hippalus@yahoo.com

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