Mitsubishi acquires 16.3 percent stake in Tangguh project

Mitsubishi acquires 16.3 percent stake in Tangguh project

TOKYO (Agencies): Mitsubishi Corp. said it acquired Occidental
Berau of Indonesia LLC, a unit of Occidental Petroleum Corp. of
the U.S., Wednesday for 60 billion yen, giving it a 16.3 percent
stake in the Tangguh LNG project in Irian Jaya, Indonesia.

Tangguh, covering three areas - Berau, Muturi and Wirigar, is
located in the northwest part of Irian Jaya, Indonesia.
Occidental Berau has a stake in the Berau block.

The share transaction made the Japanese trading giant the
second largest equity holder in the Tangguh LNG project after BP
PLC, which has 50 percent stake.

Tangguh has 14.4 trillion cubic feet of proven gas reserves,
Mitsubishi said.

Participation in the Tangguh project increased Mitsubishi-held
natural gas and crude oil reserves, based on its equity holdings,
by 33 percent to an equivalent of 1.6 billion barrels of crude
oil from 1.2 billion barrels, the company said in a statement.

In Jakarta, state oil and gas company Pertamina and BP said
they welcome the addition of Mitsubishi to the Tangguh project
partnership.

"We are pleased to have Mitsubishi join us on Tangguh.

"As a partnership, we are working towards the earliest
possible development and Mitsubishi's presence can only further
enhance confidence in Tangguh's gas marketing success in Japan as
well as in China and Korea, where we have registered much
interest in this world-class gas field," BP Associate President,
Indonesia Bill Schrader said in a statement made available to The
Jakarta Post.

BP announced on July 6 that it had increased its share of
Tangguh from 40 percent to 50 percent thorugh the acquisition of
Cairns Ltd.

With the acquistion of Occidental's shares by Mitsubishi, the
proved reserves in the Tangguh project are now 50 percent owned
by BP, 16 percent by Mitsibishi, 12 percent Nippon, 11 percent
British Gas, 10 percent KG (Kanematsu Group) and 1 percent by
Nissho Iwai.

Pertamina has said it is considering development of Tangguh as
its third LNG export center after the Bontang and Arun gas
fields.

The first and second LNG processing plants at Tangguh, each
with capacity of 3 million to 3.5 million metric tons a year, are
scheduled to come onstream in 2006.

An international tender will be opened in the second half of
this year for construction of the processing plants, or trains,
Mitsubishi said.

Pertamina hopes to sell the LNG to Japan, South Korea and
Taiwan, as well as China. (jsk)