Sunday, December 08, 2013

Total agrees to pay InterOil up to US$3.6 Billion in PNG LNG Deal

James Paton, ©2013 Bloomberg News

Total SA, Europe’s third-biggest oil company, agreed to buy a stake in InterOil Corp.’s assets in Papua New Guinea in a deal valued at as much asUS $3.6 billion as part of a plan to build a liquefied natural gas project.
Paris-based Total will acquire 61.3 percent 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 last Friday in a statement. The deal is valued at US$1.5 billion to US$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 Exxon Mobil Corp. to develop the fields. Exxon is building a US$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 percent stake in the LNG development.
Payments to InterOil include US$613 million on the completion of the transaction, expected in the first quarter of 2014, and US$112 million after a final investment decision for a new LNG plant, InterOil said. Total will pay a further US$100 million after the first LNG cargo, according to the statement. Variable payments will depend on the size of resources, it said.
InterOil is advised by Credit Suisse Group AG.

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