By Angela Macdonald-Smith
Aug. 2 (Bloomberg) — Osaka Gas Co., Japan’s second-biggest natural gas distributor, agreed to buy a 15 percent stake in Nexus Energy Ltd.’s Crux condensates project off northwest Australia, which is due to start production in 2010.
The Japanese utility will pay A$75 million ($64 million) for the interest, valuing the project at A$500 million, Melbourne- based Nexus said today in a statement to the Australian Stock Exchange. The partners plan to seek more exploration prospects, targeting “significant potential gas resources,” Nexus said.
Nexus completed initial design studies for the Crux project in February and this year completed drilling two wells at the Browse Basin Sea field. The project may produce about 900 million cubic feet a day of gas, from which more than 29,000 barrels a day of condensates may be extracted before the gas is reinjected into the field, Nexus said on its Web site.
“Osaka Gas brings considerable financial capacity to the project, which places Nexus in a position to accelerate the progress of the Crux field development,” Nexus Managing Director Ian Tchacos said in the statement.
Shares in Nexus jumped as much as 24 cents, or 16 percent, to A$1.76 on the exchange, their biggest gain for almost four months. They were at A$1.69 at 12:39 p.m. in Sydney. Condensate is a type of light oil.
Osaka Gas is a customer of the Woodside Petroleum Ltd.- operated North West Shelf venture, and has agreed to buy gas from Chevron Corp.’s proposed Gorgon LNG project in Western Australia. It also owns a stake in Woodside’s undeveloped Sunrise gas field in the Timor Sea.
The Crux field may be a candidate for a small-scale LNG project should more reserves be found in the area, Nexus said on its Web site.
Nexus has an agreement to sell natural gas from the Crux field to a Royal Dutch Shell Plc Unit.
To contact the reporter on this story: Angela Macdonald-Smith in Sydney at [email protected] .
Last Updated: August 1, 2007 23:14 EDT
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