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Japanese pair buys into Woodside LNG project

by Laura Board  |  Published May 1, 2012 at 8:44 AM
Woodside_227x128.jpgJapan's Mitsui & Co. and Mitsubishi Corp. Tuesday, May 1, agreed to spend $2 billion buying a 14.7% stake in the Browse liquefied natural gas project in western Australia from Woodside Petroleum Ltd.

The stake sale ends an auction Woodside began in January and eases concerns about the financing of a project which could potentially cost over $30 billion.

The deal with the Japanese partners, through vehicle Japan Australia LNG (MIMI Browse) Pty Ltd., is subject to Woodside's junior partners in the project, BHP Billiton Ltd., BP plc, Chevron Corp. and Royal Dutch Shell plc, not exercising pre-emption rights.

If the equity purchase by Mitsui and Mitsubishi proceeds, the deal also includes a long-term, annual 1.5 million tons supply agreement. The investors would also help Woodside secure financing for the project from Japanese banks and eventually help market the project's output in Asia.

Woodside's stake in Browse would fall to 31.3% from 46%. Browse said in January it had received approaches from potential investors in Browse, a month after it had warned that it might delay a final investment decision on the project by nearly a year to the first half of 2013 amid a protracted dispute among Browse shareholders over the project's gas-processing locations.

Shares in Perth, western Australia-based Woodside, which was last year a rumored takeover target of BHP Billiton, closed up 3.7% at A$36.20, giving the company a market value of A$29.8 billion ($30.7 billion).
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Tags: Mitsubishi Corp. | Mitsui & Co. | Woodside Petroleum Ltd.

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