nexus, shell seal crux gas deal - afr

Nexus Energy has finalised a deal with Royal Dutch Shell to bring the oil major into the Crux gas venture in the Timor Sea, opening up the potential for a new floating liquefied natural gas project.

The transaction, which also involves Osaka Gas and was initially flagged in January, will see Nexus hold a 17 per cent stake in the new venture, while Shell has 80 per cent and will take over as operator. The Japanese utility will hold the rest.

The three partners are seeking approval from their respective boards prior to executing the deal, expected by the end of July.

Development options for the Crux deposit involve building a new FLNG project to process both gas from Crux and from third parties, an early gas liquids project followed by processing of gas from the field through Shell’s $US12 billion Prelude FLNG project, or using Crux gas as “backfill” for Prelude, which would delay commercialisation of the resource into next decade.

The partners still need government approval to convert the production licence over the AC/L9 permit holding the Crux field back to a retention lease, to allow for the slower development of the resource.

Nexus said on Wednesday the regulatory authorities have been kept informed of the negotiations and a formal application will start once the binding agreements are signed.

Under the terms of the deal, Nexus has a 12-month option to sell a 2 per cent stake in Crux to Shell for $75 million.

Nexus is widely expected to exercise that option and potentially sell down more of its interest to another party


http://afr.com/p/business/companies/nexus_shell_seal_crux_gas_deal