Tokyo: Mitsubishi Corp said on Monday it will invest in a liquefied gas development project worth $2.8 billion in Indonesia via a joint venture with companies including Korea Gas Corp (KOGAS).
Mitsubishi, Japan’s biggest trading house, is looking to expand its investment in resources and growth projects in emerging economies to drive profits, and has led the LNG project, Indonesia’s fourth, from the beginning.
Mitsubishi will take a 45% stake in the joint venture, instead of 51% in an earlier plan.
KOGAS, the world’s No.1 company buyer of LNG, will have a 15% stake in the joint venture, PT Donggi-Senoro LNG, underscoring the state-run entity’s push to invest in overseas oil and gas reserves.
Mitsubishi and KOGAS have agreed to set up a special purpose company for the Donggi-Senoro project to produce and sell LNG at a plant in Sulawesi with a capacity of 2 million tonnes a year.
The other partners are Indonesian state energy firm Pertamina, with 29%, and PT Medco Energi International of Indonesia, with the remaining 11%, Mitsubishi said in a statement.
The plant, to be built by Japan’s JGC Corp, plans to start in 2014 commercial production of LNG as well as associated condensate of about 47,000 barrels par day of crude oil equivalent.
It is the second LNG project in which Mitsubishi has been involved in Indonesia after the Tangguh project.
Indonesia is the world’s third-biggest LNG exporter.
Two Japanese power companies -- Chubu Electric Power Co and Kyushu Electric Power Co -- have already reached basic agreements over long-term LNG supply with Donggi-Senoro LNG, to buy a total 1.3 million tonnes a year for about 13-year starting in the second half of 2014.
KOGAS and Donggi-Senoro LNG, based in Jakarta, are in the final stage of talks for long-term LNG supply.
KOGAS plans to import 700,000 tonnes of LNG per year in the 13-year starting from 2014 if the construction is completed, a company official said on Monday.