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+--- Thread: Kogas-Japex-Mitsui lashup (/showthread.php?tid=347)
- maui4marko - 02-07-2012
>> looks like a strong hint to me!
Korea Gas, Japex, Mitsui eye LNG riches in Papua New Guinea
by: David Winning and Min-Jeong Lee
From: The Wall Street Journal
February 07, 2012 11:10AM
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IN the race for Papua New Guinea's gas riches, there's been a notable absentee up to now: Korea Gas, the world's top importer of liquefied natural gas by volume.
Not any longer.
Korea Gas, known as Kogas, is stitching together a consortium involving Mitsui and Japan Petroleum Exploration that aims to join InterOil’s proposed gas-export project in PNG as a strategic partner, a person familiar with the matter told Deal Journal Australia.
InterOil said in September 2011 that it had mandated Macquarie Capital, Morgan Stanley and UBS to bring in a company with experience in operating large LNG production facilities.
"The considerable strengthening of the Asian LNG market, the increased interest in exploration and investment in Papua New Guinea, as well as the company’s reservoir analysis and project design fundamentals lead the company to believe that now is an attractive time to seek a partner,” InterOil said at the time.
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On offer is an equity stake in the $US6 billion ($5.59bn) plant that will convert natural gas to a liquid for export as well as associated infrastructure in PNG's Gulf province. InterOil says it is also willing to sell interests in the Elk and Antelope gas discoveries, along with exploration tenements in PNG.
PNG has an estimated 22.6 trillion cubic feet of natural gas reserves, according to UK-based consultancy Wood Mackenzie, but little new local demand for the clean-burning fuel is expected beyond mining developments such as Xstrata’s Frieda River copper-gold project and greater use by households.
That’s created an opportunity for some of the world’s biggest energy companies to invest in developing the gas reserves for export as LNG. PNG is poised to join the ranks of LNG exporters in 2014 when the ExxonMobil-led $US15.7bn PNG LNG project is slated to start up.
InterOil, which is listed on the New York Stock Exchange, is proposing to build a minimum 7.6 million-tonnes-a-year LNG plant fed by the Elk and Antelope fields. Once construction starts, it typically takes around four to five years before a facility is able to chill its first gas for export as LNG.
The person said Korean and Japanese companies initially planned to compete separately to join the InterOil project, but changed tack to work together partly to avoid bidding up the price.
InterOil’s advisers asked for bids to be lodged by early December 2011, but this was extended by a couple of months, the person said.
Kogas is more interested in operating the LNG plant, while Mitsui and Japan Petroleum Exploration - better known as Japex - are focused on securing interests in gas fields and associated liquids such as condensate, a type of light oil, the person said.
Kogas would likely then select a Korean engineering company to build the plant, giving it an opportunity to learn the technology, the person added.
In an interview with Dow Jones Newswires last year, Kogas president and chief executive Choo Kang-soo named PNG among four countries that it was targeting for a major natural-gas field development in the near term. The other countries were the US, China and Venezuela.
Kogas imported nearly 34m tonnes of LNG last year - equivalent to nearly triple the LNG volumes shipped into neighbouring China.
InterOil isn’t alone in hunting for a partner to help develop gas reserves in PNG.
Deal Journal Australia reported in December that Canada’s Talisman Energy has appointed Sydney-based advisory RFC Corporate Finance to find an investor for four licences in the forelands of western PNG, which contain a mix of gas discoveries and exploration targets. The company reckons it can aggregate between 2 trillion and 4 trillion cubic feet of gas in Papua New Guinea - enough to underpin a single unit producing LNG for export.
ASX-listed Oil Search also opened a data room on its offshore gas fields in the Gulf of Papua in the final quarter of 2011, and has already held preliminary talks with international companies with LNG expertise.
“More detailed discussions and active engagement with a number of well qualified parties will occur in the first quarter of 2012, with a view to a farm-down of our large Gulf area interests in due course,” Oil Search managing director Peter Botten said in a statement January 24.
However, potential new investors in PNG need a strong appetite for risk.
Last month, political tensions flared when a former colonel mutinied and detained the head of the armed forces, seeking to restore former prime minister Michael Somare to power. The mutiny was quickly suppressed by forces loyal to current PM Peter O’Neill, who took office when Mr Somare was out of the country due to illness last year.
“These developments have increased the risks of the country losing donor support and much needed investments, in our view,” Standard & Poor’s said in a January 27 note as it cut the outlook on PNG’s long-term sovereign credit rating to negative from stable.
- maui4marko - 02-07-2012
Interesting how Japan is extending the keiretsu arrangement to their traditional rivals, the Koreans. In this case, I understand the need to band together to try and limit price hikes. They'll still have to deal with the Chinese on that front though.
I did like these quotes:
Kogas is more interested in operating the LNG plant, while Mitsui and Japex are focused on securing interests in gas fields and associated liquids such as condensate
What do you make of this statement:
Kogas would likely then select a Korean engineering company to build the plant, giving it an opportunity to learn the technology, the person added.
- Tree - 02-07-2012
Maui4mitsui,
HoHoHo. As predicted just this morning!!
Good chit mon!!!
- Libtardius Maximus - 02-07-2012
nice pull maui, complete with tomorrow's date, here's the key graph for me...
InterOil’s advisers asked for bids to be lodged by early December 2011, but this was extended by a couple of months, the person said.
*** aren't we now a couple of months from early December 2011?
- Tree - 02-07-2012
When Jobama said he wanted 1/2 off LNG from PNG almost 2 years ago, I guess he means it.
Q: Why did Mitsui/Japex enlist KOGAS?
A: There is more gas than Mitsui/Japes know what to do with based upon strategic sourcing,
HoHoHo.
- geologydude - 02-07-2012
PPS going ballistic...over 70 right now after news out in WSJ report!
- maui4marko - 02-07-2012
Tree must've dumped his Air Jordan Silver Sneakers on craigs list and used the cash to grab those 5,ooo after hours shares at 70-1/2... nice move AirTree
- Tree - 02-07-2012
Another report, different color.
**********
Kogas, Japanese firms may join InterOil project
By David Winning
-- Kogas in talks with Japex, Mitsui to form bid consortium, source says
-- Kogas keen to run LNG plant, Japanese firms eye upstream assets
-- Companies shelved plans to act separately to avoid bidding up price
(Adds PNG gas reserves estimate in fifth paragraph, Exxon-led project in sixth, political tensions in seventh to ninth, more details on bid talks in tenth to seventeenth.)
SYDNEY (MarketWatch) -- Korea Gas Corp. is in talks with two Japanese companies aimed at bidding together to join InterOil Corp.'s IOC +3.45% proposed multibillion dollar gas-export project in Papua New Guinea, a person familiar with the matter said.
Korea Gas, known as Kogas, is seeking to form a consortium with Mitsui & Co. and Japan Petroleum Exploration Co. with a view to becoming strategic partners in InterOil's Gulf LNG project, which aims to produce a minimum of 7.6 million tons of liquefied natural gas annually.
InterOil said Sept. 30 it had mandated Morgan Stanley MS +0.98% , UBS AG UBS -0.14% and a unit of Australia's Macquarie Group to bring in a company with experience operating large LNG production facilities.
It is offering an equity stake in the US$6 billion LNG processing plant, as well as nearby infrastructure in Papua New Guinea's Gulf province. InterOil says it is also willing to sell interests in the Elk and Antelope natural gas discoveries, along with exploration tenements in the country.
Papua New Guinea has an estimated 22.6 trillion cubic feet of natural gas reserves, according to U.K.-based consultancy Wood Mackenzie, making it an attractive target for international energy companies seeking to develop projects that can export gas to booming Asian economies such as China.
ExxonMobil Corp. (XOM) and partners are investing US$15.7 billion to build the PNG project, which aims to ship LNG to customers in Japan, China and Taiwan from 2014. Canada's Talisman Energy Inc. (TLM) has also aggressively acquired tenements in Papua New Guinea with a view to aggregating gas reserves that could support an export facility.
However, investors in Papua New Guinea have to shoulder rising political risk.
Last month, a former colonel mutinied and detained the head of the armed forces in the latest twist to a power struggle between Prime Minister Peter O'Neill and his predecessor Michael Somare.
"These developments have increased the risks of the country losing donor support and much needed investments," Standard & Poor's said in a Jan. 27 note as it cut the outlook on Papua New Guinea's long-term sovereign credit rating to negative from stable.
The person said the Korean and Japanese companies initially planned to compete separately to join the InterOil project, but changed tack to work together partly to avoid bidding up the price.
InterOil's advisers asked for bids to be lodged in early December last year, but this was extended by a couple of months, the person said.
Kogas is more interested in operating the LNG plant, while Mitsui and Japan Petroleum Exploration--better known as Japex--are focused on securing interests in gas fields and associated liquids such as condensate, a type of light oil, the person added.
Kogas would likely then select a Korean engineering company to build the plant, giving it an opportunity to learn the technology, the person said.
In an interview with Dow Jones Newswires last year, Kogas president and chief executive Choo Kang-soo named Papua New Guinea among four countries it was targeting for a major natural-gas field development in the near term. The other countries were the U.S., China and Venezuela.
Kogas imported nearly 34 million tons of LNG last year--equivalent to nearly triple the LNG volumes shipped into neighboring China.
Spokespeople for Japex and Kogas declined to comment. An InterOil spokesman didn't respond to requests for comment.
A Mitsui spokesman said it was still considering evaluating a venture to strip condensate from the raw gas produced at the Elk and Antelope fields, but it hasn't made a firm decision. Mitsui signed a preliminary works joint venture with InterOil for a condensate-stripping plant in April 2010.
- admin - 02-07-2012
Nice find, Maui! Some nice counterbalance to Shell and Exxon. With the Russians unreliable, the Qataries dependent on Hormuz being open and the Indonesians reducing exports and the Australians quite expensive, where else were they're going to go? The Canada, the US, perhaps, but export is still mostly being deliberated, apart from Cherniere.
- Tree - 02-07-2012
This article and reporting was a heck of a well kept secret. Guess the CAs did their job. Me gut says, KOGAS/Mitsui/JAPEX saying they are 'seeking' means they already have agreements in principle. STP, I'd imagine a big Sumo can quite effortlessly block that back door.