LONDON (dpa-AFX) - Japanese trading companies Mitsubishi Corp. (MSBHY.PK, MSBHF.PK) and Mitsui & Co. Ltd. (MITSY.PK) on Tuesday agreed to buy for $2 billion a minority portion of Woodside Petroleum Ltd.'s (WPL.AX, WOPEY.PK, WOPEF.PK) equity in the proposed Browse LNG Project in Australia.
Japan Australia LNG (MIMI) Pty Ltd, the 50-50 joint venture between Mitsui and Mitsubishi, will make the deal as part of its efforts to further enhance its LNG business in that country. The transaction is also expected to contribute to reliable supply of energy to Japan and the East Asian region.
Woodside, through its unit Woodside Energy Ltd., is the major equity holder and operator of the proposed Browse LNG Development in the Kimberley region of Western Australia. The project aims to commercialize natural gas and condensate from the Browse gas and condensate fields.
The other joint venturers in the project include the Australian units of Shell, BP, Chevron and BHP Billiton. The companies aim to make the final investment decision by June 2013.
Following the deal, MIMI will have an estimated 14.7 percent interest in the Browse development, while Woodside's assumed unitised interest would fall to 31.3 percent from current 46 percent. Woodside will remain operator of the development.
The companies expect to close the transaction in the third quarter, subject to customary conditions including Australian governmental approvals and other project partners' waiver of their pre-emption rights.
Subject to completion of the equity deal, MIMI and Woodside have agreed for a long-term sales and purchase agreement for around 1.5 million tonnes of LNG a year from the Browse development. Under the deal, the parties will jointly market co-mingled LNG volumes to the Asian market, primarily Japanese customers.
MIMI has also agreed to support Woodside for procuring financing for development of the project.
In Japan, Mitsubishi shares closed today's trading at 1,707 yen, down 36 yen or 2.07 percent, Mitsui shares are at 1,231 yen, down 23 yen or 1.83 percent.
In Australia, Woodside are currently at A$36.27, up A$1.35 or 3.87 percent.
Copyright RTT News/dpa-AFX
© 2012 AFX News
