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re: newspaper article LNG shares plunge on Indonesian loss report
14th December 2006, 8:15 WST

Shares in Liquefied Natural Gas plunged yesterday as investors reacted to news that it may have lost a key deal to build an LNG project in Indonesia to Japanese giant Mitsubishi.

LNG had previously reported a preliminary gas supply agreement with Indonesia’s State-owned energy producer PT Pertamina and PT Medco that was to have underpinned the construction of a $US500 million ($640 million), 1.8 million tonne a year LNG plant in Sulawesi.

The proposed Padang plant was one of LNG’s key focuses and a final supply contract for the gas from the nearby Senoro fields was expected to be awarded last month.

But a gas industry newsletter reported earlier this week that Pertamina had instead decided to join Mitsubishi in a separate $US800 million LNG plant.

LNG shares plunged 10¢, or nearly 15 per cent, yesterday on the report to 57¢.

“We find the reported outcome particularly surprising,” LNG managing director Maurice Brand said. Mr Brand said an agreement with Mitsubishi would breach an exclusivity agreement signed between LNG and Pertamina and fellow gasfield owner Medco in May last year.

“The company is considering its position on both these issues and any necessary action to protect shareholders’ interests, including funds expended by the company in good faith and based on commitments given by all parties under the exclusivity agreement,” he said.

However if the reports were indeed true and Mitsubishi had won the contract Mr Brand said the work undertaken so far on planning for the Padang project would not go to waste and could be applied to its other projects