News: Eastern Star Gas sells stakes in LNG projec

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Eastern Star Gas Ltd (ASX:ESG) has struck a deal with Japan's Marubeni Corporation to ramp up the commercialisation at proposed liquefied natural gas projects.

The deal will allow Marubeni and other LNG buyers to acquire equity in both Eastern Star Gas's LNG Newcastle and Narrabri Coal Seam Gas projects.

Marubeni will have a lead role in buying and marketing LNG from the project.

APA Group (ASX:APA) in conjunction with Marubeni, will construct and operate a gas pipeline to deliver coal seam gas from Narrabri to Newcastle.

Eastern Star Gas managing director David Casey says the deal will assist in securing foundation LNG buyers as well as providing development funding.

The oil and gas producer expects to make a decision on when to start front end engineering and design for Narrabri by the end of the year and says it will retain a controlling interest in the project.

Eastern Star Gas booked a loss of $6.54 million in the year to 30 June 2010.