InterOil receives strong interest in LNG project. Companies knocking on their door..

INTERVIEW-InterOil says has strong interest for LNG project
13/05/2009 6:58:07 PM

* InterOil jv looking to sell up to 35% stake in LNG project

* Says has received strong interest

* Expects indicative bids by June-July

By Fayen Wong and Sharon Klyne

PERTH/MELBOURNE, May 13 (Reuters) – Canadian oil firm InterOil Corp has received strong interest from global oil majors and utilities to invest in its proposed $4.5 billion liquefied natural gas (LNG) project in Papua New Guinea, it said on Wednesday.

InterOil and its project partner, Pacific LNG Operations Ltd, are looking to sell a stake of between 20-35 percent in the project, as well as stakes in the upstream gas assets, InterOil’s Chief Executive Phil Mulacek said.

“People that want to have a strategic interest in Asia and who want to be LNG operators have been knocking on our doors,” Mulacek told Reuters in a telephone interview from the PNG capital Port Moresby.

“We’ve got a premium quality onshore asset so a lot of the conventional LNG players and offtakers are interested in investing in this project.”

Companies that have expressed interest include France’s Total , Italy’s ENI SpA , U.S. Marathon Oil , Thailand’s PTT PCL , Japan’s Mitsui & Co <8031.T> and Osaka Gas <9532.T>, said a banking source familiar with the deal who requested anonymity due to the sensitive nature of the process.

Mulacek declined to comment on the list of companies interested in participating in the project.

The joint venture partners are also looking to sell up to 35 percent of their gas assets, which comprise of the Elk and Antelope gas fields which will fully underpin the LNG export facility.

Mulacek said a global energy major that has the ability to operate an LNG plant might consider a larger stake of around 25 percent or more.

Indicative bids are expected by June or July, he said. Interoil currently holds an 87 percent stake in the project while privately-owned Pacific LNG Operations has 13 percent.

InterOil said in March the project would cost about $4.5 billion with targeted production of about 3.5 million tonnes a year, with shipments due to start in 2014. (Editing by James Thornhill)

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Hmm:

• 87% stake..
• Lot’s of interest
• Indicative bids in by June, July
• Project cost are falling, now $4.5B estimate, from a $5-7B estimate, this is because the overcapacity in many industries has made things quite a bit cheaper.