Thu, May 17, 2012 - Page 10 News List

Japan to pay US$4.4bn for Australian gas field stake

AFP, TOKYO

Japan’s government and several major firms are to buy a 10 percent stake in an Australian natural gas field as the country seeks alternatives to atomic power, a spokeswoman for one of the companies said yesterday.

The consortium, including the operator of the crippled Fukushima Dai-ichi nuclear power plant, Tokyo Electric Power and state-backed Japan Oil, Gas and Metals National Corp (JOGMEC), is to invest US$4.4 billion in the Wheatstone liquefied natural gas (LNG) project in the state of Western Australia, a JOGMEC spokeswoman said.

Japan is heavily involved in Australia’s burgeoning LNG sector and a major customer for its gas as it searches for alternatives to nuclear power following last year’s crisis at the plant, operated by Tokyo Electric Power Co (TEPCO).

The Asian nation is the world’s biggest LNG importer.

All 50 of Japan’s atomic reactors remain switched off amid a wave of anti-nuclear sentiment after last year’s tsunami swamped reactors at Fukushima, sending them into meltdown.

The consortium, which will pay about ¥350 billion (US$4.4 billion) for the investment in a project led by US-based Chevron, also includes Japanese trading house Mitsubishi Corp and shipping company Nippon Yusen, the spokeswoman said.

TEPCO said in 2009 that it would acquire 15 percent of the gas field development rights and an 11.25 percent interest in the business, which is expected to produce 8.9 million tonnes annually from 2016.

The utility’s negotiations were put on hold after the March 11 quake-tsunami disaster last year, which sparked the worst atomic crisis in a generation.

However, as Chinese and other foreign rivals eyed the gas field project, “the government decided to support the deal through JOGMEC,” the company spokeswoman said.

The move comes as Australian foreign minister Bob Carr arrived in Japan yesterday for talks with his Japanese counterpart.

The deal also comes amid expected customer price hikes at TEPCO, in which Tokyo is buying a controlling stake as the firm faces a huge clean-up and compensation bill over the disaster.

The troubled company has said it will hike electricity rates under a 10-year restructuring because of surging fuel costs for thermal power generation, which had to be ramped up following the nuclear plant shutdowns.

In January, Tokyo-based energy firm Inpex and France’s Total unveiled a huge US$34 billion LNG project in western Australia with annual output of 8.4 million tonnes, serving Japanese and Taiwanese clients.

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