SYDNEY Oct 9 Tokyo Gas Co is in talks
to buy a less than 10 percent stake in BG Group's
Australian liquefied natural gas project, the Wall Street
Journal said, citing a senior official at the Japanese firm.
The deal includes the purchase of 1 million tonnes of LNG a
year from the Australian project, which is under development. It
was set to be announced "very soon", Tokyo Gas representative
director and executive vice president, Shigeru Muraki said in
A BG Group spokesman in Australia contacted by Reuters
declined to comment.
A deal would add to a string of LNG transactions by Japanese
companies scouring the market for fuel supplies as the country
seeks to end nuclear power generation in the wake of an
earthquake and tsunami that caused radiation leaks at the
Fukushima nuclear plant in 2011.
It also offers BG a way to share some of the cost blowouts
at the project. Earlier this year BG said the development cost
had risen to $20.4 billion from an estimated $15 billion due to
a higher Australian dollar, and increased labour and raw
BG started the process to sell an up to 20 percent equity
stake, estimated by sources to be worth about $2 billion, in the
first quarter of calendar 2012. However, it struggled with the
deal as global volatility and a weakening outlook for
commodities crimped investor appetite.
The British firm is among global oil majors developing $200
billion of liquefied natural gas export projects in Australia.
Developers of other projects are also shedding stakes to free up
Origin Energy and ConocoPhillips are in
talks to sell a combined 15 percent stake in their Australian
LNG project. Rival Woodside Petroleum last month
completed the sale of a 16 percent stake in its Browse LNG
project to Mitsui & Co and Mitsubishi Corp