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Total buys stake from InterOil in PNG LNG project

12.06.2013  | 

Total, agreed to buy a stake in InterOil’s assets in Papua New Guinea in a deal valued at as much as $3.6 billion as part of a plan to build a liquefied natural gas project.

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By JAMES PATON

PARIS (Bloomberg) -- Total agreed to buy a stake in InterOil’s assets in Papua New Guinea (PNG) in a deal valued at as much as $3.6 billion as part of a plan to build a liquefied natural gas (LNG) project.

Total will acquire 61.3 % of a license that includes the Elk and Antelope gas fields in Papua New Guinea and get the right to invest in further exploration blocks, InterOil said in a statement. The deal is valued at $1.5 billion to $3.6 billion, depending on the size of the gas resources in the region, according to the statement.

InterOil has been searching for an international partner to help fund a Papua New Guinea natural gas project since 2009 and said in May that it had started discussions with ExxonMobil to develop the fields. Exxon is building a $19 billion LNG project in Papua New Guinea scheduled to start in 2014 to meet rising Asian demand for the commodity.

Total will operate the proposed LNG project, which will depend on the gas resources being certified and engineering and design work, according to the statement. InterOil said it will keep a 30 % stake in the LNG development.

Payments to InterOil include $613 million on the completion of the transaction, expected in the the first quarter of 2014, and $112 million after a final investment decision for a new LNG plant, InterOil said. 

Total will pay a further $100 million after the first LNG cargo, according to the statement. Variable payments will depend on the size of resources, it said.



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