By OGJ editors
HOUSTON, Feb. 10 -- Units of China's CNOOC Ltd. and LNG Japan Corp. agreed to increase their Tangguh LNG project holdings, blocking BG Group's sale of its 50% interest in the Muturi Production Sharing Contract to Mitsui Indonesia Gas BV.
The Muturi PSC is in West Papua, Indonesia. Mitsui Indonesia had planned to buy BG Group's stake (OGJ, Dec. 15, 2003, p. 32), bringing with it 10.73% of the Tangguh LNG project.
But CNOOC Muturi Ltd. signed a sale and purchase agreement with BG Group to acquire a 20.767% interest in the Muturi PSC for $98.1 million. This purchase will increase CNOOC Ltd.'s interest in the Muturi PSC to 64.767% from 44%, and its interest in the Tangguh LNG Project will increase to 16.96% from 12.5%.
CNOOC Muturi is acquiring this interest pursuant to the exercise of its pre-emption rights in the BG Group sale. The remainder of the pre-emption rights interest will be acquired by Indonesia Natural Gas Resources Muturi Inc., a wholly owned subsidiary of LNG Japan, a joint venture between Nissho Iwai Corp. and Sumitomo Corp.
The effective date of the transaction is retroactive to Jan. 1. Completion of the transaction, subject to Indonesian government and partner approvals, is expected to be completed within the second quarter.