Mitsui grabs slice of Tangguh LNG

Mitsui & Co has acquired a stake in the lucrative Tangguh LNG field after signing a US$236 million contract with BG International for 50% of the Muturi natural gas field in West Papua, Indonesia. This 50% interest also includes a 10.7% share in the Tangguh LNG project due to begin operation in 2007.

A Mitsui company spokesperson acknowledged that the deal is designed to participate in Tangguh liquefied natural gas (LNG) production from a field that has estimated reserves of 432 billion cubic metres of gas.

The share in the Tangguh project is also seen as beneficial to the fiscal well being of Mitsui as, according to the spokesperson, "the LNG facility is expected to produce up to 10.5 million tonnes of LNG a year."

Tangguh is being developed at a total cost of US$3 billion by British Petroleum while Mitsui's target market is the Asia-Pacific, including Japan, the US, China and South Korea.

BP is the largest stakeholder (37.2%) with a Mitsubishi Corp and Index Corp joint venture holding 16.3%, CNOOC Ltd owning 12.5% and Nippon Oil Corp holding on to 12.2% share. Once ratified, Mitsui and the other Japanese companies will hold a majority share - making Tangguh the first major natural gas development scheme under Japanese control.