Mitsubishi Buys PNG Gas Assets For US$280 Million

[petrengr1]

http://blogs.wsj.com/dealjournalaustrali...d=yahoo_hs

[jft310]

I like this part "international energy companies including Korea Gas and Japan Petroleum Exploration are also mulling entering the country via M&A."

[Palm]

Wait, you mean Shell is not the only big operator that will be allowed in PNG? That can't be. This article mentions several very important things:
1. This price is based on prospects, not any drilled wells
2. NG/LNG from PNG is cheaper than Australia's
3. Proximity to Japan is important
4. Japan is velly velly thirsty

Nice find Pet!

[Tree]

MIMI (Mitsui/Mitsubishi) often work together in big energy projects.
Scooped by the same guy that wrote the JKM lash-up.
Big Dogs are moving in.

[Palm]

I find something very disturbing here. The article states that Mitsubishi and OSH filed a term sheet in "the middle of last year" for these prospects. Yet in scanning the OSH website I see NOTHING disclosing this matter. OSH is WAY too much like IOC. Management keeping secrets, not making disclosures that paranoid shareholders might want to know, and they are missing deadlines left and right. These two companies are way too much alike and can't be trusted.

Who can we get involved with this and maybe have them go to the OSH Yahoo Board to raise these questions? This has to stop.

[TomCrooz]

22.6 T estimated reserves in all of PNG? Does this mean that nobody other than IOC has any gas?

[jft310]

Guuuuud One Tom.

[Palm]

That's what they say croozer (22.6Ts). Don't know why IOC is even drilling T2; can't be much there if that total is correct. Get ready for another Weber grill propane flare in the next couple of weeks.

[Gator]

DJ UPDATE: Mitsubishi Inks US$280M Deal For Papua New Guinea Gas Assets


9:59 AM (GMT-05:00) Eastern Time (US & Canada) Feb 22, 2012
--Mitsubishi to hold average 20% interest in nine licenses, Talisman 40% --Companies to work together on possible 3 million ton/year LNG exports --Deal includes license containing discoveries containing 2.4 tcf of natural gas throughout) By David Winning and Mari Iwata Of DOW JONES NEWSWIRES SYDNEY (Dow Jones)--Japan's Mitsubishi Corp. (8058.TO) has agreed to a US$280 million deal to buy stakes in nine of Talisman Energy Inc.'s (TLM) natural-gas blocks in Papua New Guinea, Talisman said Wednesday. The deal comes as Japan vies for access to natural-gas developments globally as it looks for alternative fuel sources to nuclear energy, which as recently as 2010 accounted for 30% of the country's power supply. Japan is facing a big drop in nuclear-power output following a series of explosions and radiation leaks at the Fukushima Daiichi reactor complex, which was damaged by the devastating earthquake and tsunami nearly a year ago. Since then, other reactors across Japan that shut down for regular inspections have stayed offline. Canada's Talisman has invested aggressively in expanding its footprint in the western forelands of Papua New Guinea with a view to aggregating several natural-gas discoveries, including the US$177 million takeover of Rift Oil PLC in 2009. "Talisman and Mitsubishi have agreed to work together closely to aggregate natural gas in the Western Province of Papua New Guinea with a view to potential liquefied natural gas export of approximately 3 million metric tons per annum," Talisman said in a statement. Mitsubishi will now hold an average of 20% in the nine licenses and Talisman will own 40%. The deal includes the PPL 235 license, which contains the Puk Puk, Douglas and Langia discoveries that contain a combined 2.4 trillion cubic feet of gas in place. Three exploration wells have been drilled so far in PPL 235, which Talisman acquired through the Rift Oil takeover, and all have discovered natural gas. "Mitsubishi brings extensive experience in liquefied natural gas development and marketing and I am confident they will be a key success factor in helping us unlock the value of our Papua New Guinea assets," Paul Blakeley, Talisman's Executive Vice-President of International Operations East, said. Japan is the world's biggest buyer of liquefied natural gas, or LNG, which is a natural gas supercooled to a liquid form so it can be transported by ship. In the final three quarters of last year, Japan's power utilities boosted imports of natural gas by some US$7.5 billion, contributing to Japan recording its first trade deficit in more than three decades. LNG purchases again rose sharply in January, up 39% to 5.19 million tons. Analysts expect Japan's LNG demand to remain strong in the medium term as nuclear power plants face extra scrutiny after the earthquake and coal-fired power falls out of favor because of the emissions it produces. This shift to LNG is benefiting projects that are planned or under construction in Papua New Guinea and Australia, which are accessible by tanker without passing through the potential choke point of the Strait of Malacca, near Singapore. Inpex Corp. (1605.TO) and French partner Total SA (TOT) have signed binding agreements to sell most of the planned annual output of 8.4 million metric tons of LNG from the US$34 billion Ichthys LNG project in Australia to Japanese companies. Japanese companies have also firmed up preliminary deals for LNG supply from the Chevron-led A$43 billion Gorgon LNG project offshore Western Australia state, and BG Group PLC's (BG.LN) Queensland Curtis LNG project in eastern Australia, since last year's earthquake. Two proposals for LNG export terminals have already been unveiled in PNG, with the ExxonMobil Corp.-led PNG LNG project under construction and due to ship its first gas in 2014. The US$15.7 billion project has gas sales agreements in place with customers in China, Japan and Taiwan. In addition to the Exxon-led venture, an LNG project has been proposed by Liquid Niugini Gas Ltd., a consortium of companies including Canada's InterOil Corp. (IOC).

[Putncalls]

That works out to about 50 cents per MCF.