For the last two years, InterOil Corp. has been looking to
tap into the liquefied natural gas reserves under Papua New Guinea which could
yield more than 5 trillion cubic feet of gas.
Last week, the company agreed to sell a majority stake in
the LNG development project to Total SA (NYSE: TOT) for an as-of-yet
undetermined amount. The deal could be worth up to $3.6 billion, depending upon
the fecundity of the fields in Papua New Guinea.
Australia's Oil Search is reportedly in talks with InterOil
getting involved with the project as well. The company has been operating in
PNG since 1929 and already works with Total on exploration projects there.
The development of LNG wells by Total and Oil Search is seen
as a competitive move against ExxonMobil (NYSE: XOM), which operates a $20
billion liquefied natural gas facility in Papua New Guinea. ExxonMobil will
begin shipping gas to Asia in 2014.
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