Osaka Gas buys stakes in Timor Sea fields
Osaka Gas Co. Ltd., Japan's second largest city gas utility, has acquired a 10% stake in the Greater Sunrise and Evans Shoal gas and condensate fields in the Timor Sea off northwestern Australia from Woodside Petroleum Ltd. and Shell Australia Ltd.
TOKYO�Osaka Gas Co. Ltd., Japan's second largest city gas utility, has acquired a 10% stake in the Sunrise, Sunset, and Troubadour (collectively known as Greater Sunrise) and Evans Shoal gas-condensate fields in the Timor Sea off northwestern Australia from Woodside Petroleum Ltd. and Shell Australia Ltd.
Under the deal, Osaka Gas will pay $67.2 million for Woodside's 10% stake in Greater Sunrise Permits NT/RL2, NT/P55, ZOCA 95-19, and ZOCA 96-20. Osaka Gas did not disclose details of the purchase of Shell's 10% in Permits NT/P47 and NT/P48, however.
Osaka Gas says that the acquisitions are part of its moves to acquire direct stakes in gas projects to feed its domestic needs. The move also makes Osaka the first Japanese gas company to invest in the development stage of overseas gas fields.
Shell and Woodside say the divestiture is consistent with their previously announced strategy of introducing new strategic partners into the venture "to improve the prospects of commercializing these northern Australian gas assets."
The firms said in a joint statement, "Osaka Gas has extensive gas distribution and marketing knowledge in Japan and is also a significant potential gas customer in its own right. Woodside and Shell will continue to retain significant interests in these gas resources."
Shell and Woodside's initial development plans for the fields were based on an onshore project supplying 600 MMcfd of gas to the Darwin and northern Australia markets starting in 2005. A letter of intent was signed in March with Canada's Methanex Corp. for the construction of a large methanol and gas-to-liquids plant in Darwin. However, from 2010, Osaka Gas hopes to secure 1 million tonnes/year of LNG from the fields, to be sold in Japan.
Greater Sunrise is estimated to hold probable reserves of 9.16 tcf of dry gas and 321 million bbl of condensate. Probable reserves at Evans Shoal are 6.6 tcf and 31 million bbl.
The sale is subject to regulatory approvals and preemption by partner Phillips Petroleum Co. in the Greater Sunrise permits and by Timor Sea Petroleum NL in Evans Shoal.