China National Offshore Oil Corporation (CNOOC) announced that it will invest US$98.1 million to increase its stake in a natural gas project in Indonesia. CNOOC will pre-empt the sale of UK-based BG Group's stake in the Muturi Production Sharing Contract to Japan-based Mitsui & Co by exercising its option in the contract.
For raising its investment, Baosteel will receive a 20.8% stake in the contract, increasing its share in the Tangguh gas project from 12.5% to 17%. The Tangguh project is scheduled to start supplying liquefied natural gas (LNG) to China in the next few years.
The US$3 billion project is led by British Petroleum and is projected to commence commercial production in 2007. It is expected to produce 10 million tons of LNG per year, 2.6 million tons of which will go to China.