Tokyo Gas in BG deal for LNG
The Age
Thursday April 1, 2010
JAPAN has signalled its willingness to buy liquefied natural gas converted from coal seam methane, with Tokyo Gas the first Japanese utility to sign a deal to receive the unconventional gas.In a further sign energy-hungry countries will increasingly accept the lean gas, Tokyo Gas has announced a deal with BG Group for 1.2 million tonnes a year of LNG for 20 years from 2015 in BG's Queensland Curtis project.The deal also continues the trend towards international LNG buyers acquiring equity positions in Australian projects.Tokyo Gas will receive a 1.25 per cent interest in reserves and resources of certain tenements in Queensland's Surat Basin and a 2.5 per cent equity interest in BG's second processing train. No value was put on the transaction but some say it could worth between $13 billion and $26 billion.The deal will be a headache for Woodside's Don Voelte, a critic of east-coast coal seam gas projects. He has said before that the coal seam gas industry in Australia will stall because traditional buyers of liquefied natural gas, such as Japan and Korea, will not accept the lower calorific value of LNG converted from coal seam methane.The deal also trumps BG rival Santos, which UBS last week said had narrowed the list of potential customers from its neighbouring Curtis Island project to Tokyo Electric Power, Tokyo Gas and Korea Gas.BG said the deal would be a binding agreement by the end of the year.
© 2010 The Age
