JAPAN’S biggest trading house, Mitsubishi, has decided to invest in a liquefied natural gas project worth $2.8bn (£1.76bn) in Indonesia via a joint venture, shoring up the confidence of investors who once feared the deal might go awry.
Securing two million tonnes of LNG a year from 2014 would have little impact on the world’s energy supply, but the new project will supplement a decline in LNG exports from Indonesia, the world’s third biggest exporter of the fuel, and signal multilateral cooperation by sharing the burden of often costly resource development.
Mitsubishi will take a 45 per cent stake in the joint venture, instead of 51 per cent earlier planned, the company said in a statement yesterday, in a move that helps brings in another partner, Korea’s state-run Kogas.
Korea Gas, the company that is the world’s number one buyer of LNG, will have a 15 per cent stake in the joint venture, PT Donggi-Senoro LNG, underscoring the state-run entity’s push to invest in overseas oil and gas.
Mitsubishi and Kogas will set up a special purpose company for the Donggi-Senoro project to produce and sell LNG at a plant in Sulawesi with a capacity of two million tonnes a year.
Nearly 72 per cent of the production at the gas fields the joint venture will buy from has been earmarked for export via the LNG plant.
The other partners are Indonesian state energy firm Pertamina, with 29 per cent, and PT Medco Energi International of Indonesia, with the remaining 11 per cent.
City A.M. Reporter