Japan's JX to sell PNG LNG project stake to Marubeni

TOKYO: JX Nippon Oil & Gas Exploration Corp, a unit of Japan's JX Holdings, said on Monday it would sell a small stake in an Exxon Mobil-led liquefied natural gas (LNG) project in Papua New Guinea to trading house Marubeni Corp.

Japan is the world's largest LNG consumer, and its appetite for gas is rising as utilities burn it to compensate for the loss of nuclear power generation capacity after the March earthquake and tsunami shattered public trust in nuclear safety, preventing the restart of reactors shut for maintenance.

JX and Marubeni are set to sign a contract on the share transfer on Monday, an official at JX Nippon Oil said. The Nikkei business daily reported that Marubeni will pay around 23 billion yen ($298 million) for a 21 percent stake in Merlin Petroleum, but the official could not confirm that.

Merlin, owned about 99.3 percent owned by JX and the rest by Mitsubishi Corp, holds a 4.7 percent stake in the $15 billion Papua New Guinea LNG project.

A Marubeni spokesman could not immediately comment on the matter.

Tokyo Electric Power will buy 1.8 million tonnes of LNG per year from the project for 20 years and Osaka Gas will buy 1.5 million tonnes, while China's Sinopec will buy 2 million tonnes per year.

The project, which is expected to produce 6.6 million tonnes per annum and come online in 2014, is a joint venture between Exxon Mobil, Oil Search, Santos, JX Nippon Oil, and the Papua New Guinea government.

Copyright Reuters, 2011