Eastern Star Gas: Progressing Arrangements for Export of LNG (Australia)

Eastern Star Gas (ESG) today announced it has entered into an agreement with Marubeni Corporation putting in place a series of prospective arrangements to expedite commercialisation of ESG’s proposed LNG Newcastle (LNGN) Project.

Objectives of the agreement with Marubeni include:

– ESG making available to LNG buyers, including Marubeni, an equity interest in the Narrabri Coal Seam Gas Project.

– The APA Group, working in conjunction with Marubeni and associated entities, assuming responsibility for construction, ownership and operation of a gas pipeline to deliver coal seam gas from Narrabri to Newcastle subject to terms of a gas transportation agreement to be developed.

– Marubeni together with prospective LNG buyers taking equity in the LNGN Project with Marubeni having a lead role in offtaking and marketing of LNG from the project.

Mr David Casey, Managing Director of ESG, said “a key benefit flowing from Marubeni’s involvement in the LNGN Project is the expertise it brings in terms of LNG offtaking, marketing and shipping and their taking an active role in securing foundation LNG buyers.

The availability of equity in the Narrabri CSG Project is intended to help in achieving this goal as well as to provide devolvement funding. Importantly, ESG will retain a controlling interest in the Narrabri CSG Project. Through the collaboration with Marubeni, by year end a decision can be confidently taken to commence front end engineering and design for the LNGN Project”.

Mr Casey added “the transaction with Marubeni represents a further, important step toward realisation of Eastern Star Gas’ plan to develop the LNGN Project using natural gas from the Narrabri CSG Project. Marubeni’s involvement is an ideal complement to the technical expertise already flowing from Hitachi Corporation and Toyo Engineering Corporation, with the Feasibility Study for the LNGN Project still on track for completion before year end”.

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Source: Eastern Star Gas, October 14, 2010