June 30, 2003
The Tokyo Electric Power Company, Incorporated
Tokyo Gas Co., Ltd.
Tokyo - Tokyo Electric Power Co. (TEPCO) and Tokyo Gas Co., Ltd. (Tokyo Gas)
have officially finalized their participation in the Darwin LNG Project. The
operator of the project is an affiliate of ConocoPhillips. TEPCO and Tokyo Gas
have participated in the development of Bayu-Undan Field located in the Joint
Petroleum Development Area (JPDA) of Timor-Leste and Australia, the pipeline
from the JPDA to Australia and sales of LNG produced near Darwin, Australia
from feedgas sourced from the field.
The participation in the field is via the acquisition of shares of Phillips
Petroleum Timor Sea Inc. (PPTSI), which indirectly owns a 10.08% interest in
the field, by TEPCO and Tokyo Gas in the ratio of two to one. As announced on
March 12, 2002, a Share Sale & Purchase Agreement was agreed upon in the same
month, and the acquisition was to be completed only after fulfilling certain
conditions including necessary approvals from the relevant authorities regarding
a gas development plan.
Following the grant of formal approval for the Gas Development Plan from the
Designated Authority on June 13, 2003, TEPCO and Tokyo Gas completed the
acquisition of PPTSI on June 27 and changed the company name to Tokyo Timor Sea
Resources Inc. Furthermore, in separate transactions, TEPCO and Tokyo Gas
completed arrangements to participate in the pipeline to be laid from the field
to near Darwin, and in the LNG Plant project to be constructed near Darwin, by
using newly established subsidiaries of each company, namely TEPCO Darwin LNG
Pty Ltd, and Tokyo Gas Darwin LNG Pty Ltd.
The Bayu-Undan field is located 500 kilometers offshore from Darwin, and 250
kilometers off the south coast of Timor Leste. In addition to 3.4 trillion cubic
feet of natural gas (equivalent of approx. 80 million tons of LNG), the field
has reserves of about 400 million barrels of condensate and LPG. The condensate
and LPG are to be shipped from an offshore facility for sale from 1Q 2004. The
LNG is to be shipped from Darwin for sale to TEPCO (2 million tons /yr) and Tokyo
Gas (1 million tons /yr) from 1Q 2006.
Through this participation, TEPCO and Tokyo Gas will have a direct involvement
in the development and production of gas for power generation and city gas
feedstocks. Combined with the LNG transportation business using their own LNG
ships, both companies will be able to participate in the entire LNG chain: gas
production, pipeline transportation, liquefaction, marketing, shipping and
consumption of LNG in power generation and gas distribution. They believe the
participation in the LNG business chain will secure a stable and economic supply
of the fuel and city gas feedstocks.
TEPCO and Tokyo Gas, as pioneers of LNG introduction in Japan, will make every
effort to make a successful project to create a new paradigm for LNG, together
with the relevant governmental authorities of Timor-Leste and Australia, local
governments and authorities, ConocoPhillips, and other project participants
including ENI of Italy, Santos of Australia, and Inpex of Japan.
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