BG sells stake in Tangguh for $236m

The Jakarta Post, Jakarta

British firm BG Group PLC has sold its 10.7 percent stake in the Tangguh liquefied natural gas project in Papua to Japanese- owned Indonesia Natural Inc. (INGRMI) and Chinese company CNOOC Mutur Ltd, for US$236 million.

Under the deal, INGRMI, a subsidiary of LNG Japan Corp, will acquire 29.23 percent of BG's 50 percent interest in the Muturi Production Sharing Contract (PSC). CNOOC, a subsidiary of Chinese firm CNOOC Ltd, would acquire the remaining 20.77 percent, BG said in a statement on Tuesday.

Muturi PSC is one of several concession areas that is to provide natural gas to the Tangguh plant in the Bird's Head area of Papua. It will be developed by a consortium led by Anglo- American energy giant British Petroleum (BP).

Other concessions which supply gas to Tangguh are Wiriagar and Berau.

Prior to the deal, BG had a 10.7 percent stake in the Tangguh project.

The deal will bring the stake owned by LNG Japan, which is a consortium of Japanese firms Nissho Iwai Corp. and Sumitomo Corp., in Tangguh to 7.4 percent from 1.1 percent, while CNOOC's stake in the project will rise to 16.69 percent from 12.5 percent.

BP, the consortium, leader has a 37.16 percent stake in the project, while the remaining shares are owned by several other Japanese firms.

"The effective date of the transaction remains Jan. 1, 2004 and the sale consideration is $236 million in cash," BG said in its statement.

The deal depended on the Indonesian government's approval, which was expected to come in the second quarter of the year, it said.