Mitsubishi Corporation

Press Room

December 22, 2011

Korea Gas Corporation to Participate in Senoro-Toili Natural Gas Field in Indonesia

Mitsubishi Corporation (MC) is pleased to announce that MC has invited Korea Gas Corporation (KOGAS), Korea’s largest national gas company as a partner in the Senoro-Toili natural gas field located in Central Sulawesi Province, Indonesia, by transferring 49% of MC’s shares in London-based subsidiary Tomori E&P Limited, which owns a 20% working interest in this asset.
 
The field will have a major role in supplying natural gas to PT. Donggi-Senoro LNG (PT DSLNG), which MC and KOGAS indirectly own a 59.9% share through a jointly owned holding company. With KOGAS’s participation in the upstream, MC and KOGAS will now jointly promote Donggi-Senoro LNG project by being involved in the whole LNG value chain extending from natural gas development to LNG production and sales.
 
The ownership in the field is 50% by a subsidiary of PT. Pertamina (Persero), 30% by a subsidiary of PT. Medco Energi Internasional Tbk and the remaning 20% by Tomori E&P Limited. As a result of this transaction, MC indirectly holds 10.2% of the working interest in this asset, through its 51% shareholding in Tomori E&P Limited.
 
The field began production of crude oil in 2005, and development of natural gas has commenced with the aim of commencing production in 2014. The natural gas produced at the field will be supplied domestically within Indonesia and also to PT DSLNG (approximately 250 million standard cubic feet per day, approximately 1.5 million tons/year LNG equivalent), which will contribute to approximately 75% of the required volumes to produce liquefied natural gas (LNG) that will be exported to Japan and South Korea from the second half of 2014. The owners of PT DSLNG, an LNG production and sales company (which is planning to produce approximately 2.0 million tons/year of LNG) are Sulawesi LNG Development Limited (MC 75%, KOGAS 25%) which holds 59.9%, and a subsidiary of PT. Pertamina and a subsidary of PT. Medco Energi International Tbk which holds the remaining 29% and 11.1%, respectively.
 
MC and KOGAS have established a good long-standing relationship through LNG projects MC has invested in and through MC’s coordination of LNG swap transactions between KOGAS and Japanese utilities. This has been further enhanced through joint participation in the Donggi-Senoro LNG Project where a final investment decision was made in January and the execution in February of a Memorandum of Understanding for strategic collaboration in the natural gas business, which led to collaboration in developing a shale gas project in Canada in June.
 
In response to the growing interest in clean energy and the rise of emerging economies, the demand for natural gas is expected to increase in the future. The participation of KOGAS makes this project the first joint LNG project between Japan, Korea and Indonesia, which spans across the whole LNG value chain extending from the upstream to the downstream of the Donggi-Senoro LNG project. This will not only assist in ensuring the stable supply of LNG to Japan and Korea, but also enhance the value of the entire project and contribute even further to Indonesia’s fast-growing economy.
[Project Scheme]
[Project Scheme]

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