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INTERVIEW-Arrow Energy says near LNG sale deal, Shell keen

Reuters UK

INTERVIEW-Arrow Energy says near LNG sale deal, Shell keen

Fri Sep 5, 2008 1:14pm BST
 

By Tom Bergin

 

LONDON, Sept 5 (Reuters) – The chief executive of Australia’s Arrow Energy  said a deal to sell its coal seam gas as liquefied natural gas was “a matter of weeks” away and Royal Dutch Shell Plc was among the potential buyers.

Nick Davies told Reuters in an interview on Friday that Shell could also take a stake in the company which is freezing the gas, LNG Ltd (LNG.AX: QuoteProfileResearch), and that Arrow would likely buy a 20 percent stake in LNG Ltd’s Gladstone LNG project.

Arrow has large coal beds that are rich in natural gas. The company plans to extract the gas for export as liquefied natural gas, which is gas cooled to liquid and transported in pressurised ships.

Arrow has agreed to sell its gas to LNG Ltd, in which it has a 10 percent stake, which will then operate the LNG plant at Gladstone in Queensland.

LNG Ltd has been trying to find a buyer for the LNG and Davies said a deal was expected “soon”.

“It should be a matter of weeks,” he added.

He said a number of parties had expressed an interest in buying the full output of the project’s first 1.5 million tonnes per annum LNG train, which he expects will then be sold into the spot Asian market.

“Shell is in discussions … They’re discussing offtake and project structure,” he said. (Reporting by Tom Bergin, editing by Will Waterman)

 

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