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January 30, 2008
Osaka Gas Co., Ltd.
The Board of Directors of Osaka Gas approved today an agreement with Contango Oil and Gas Co. for an acquisition of Contango's 10% interest in Freeport LNG receiving terminal. For this transaction, Osaka Gas has established two affiliates, both incorporated in Delaware, U.S.A. The two affiliates are Osaka Gas Freedom Energy Corporation and Turbo LNG LLC, the former to further oil and gas business in the United States and the latter as a special purpose vehicle to own the equity interest in the terminal.
Freeport LNG terminal, currently under construction, is located near Freeport in the southern coast of Texas. The terminal is expected to start commercial operation in June 2008. Freeport has total LNG storage capacity of 320,000m3and the regasification capacity of 1.8 billion cubic feet/day. The regasification and sendout capacity of the terminal is fully contracted by ConocoPhillips, The Dow Chemical, and MC Global Gas, a subsidiary of Mitsubishi Corporation, for a period of up to 25 years after commencement of company operation.
The transaction is a major milestone for Osaka Gas in making its entry into the US LNG market where a robust growth of LNG demand is expected in the coming years. Through this investment, the company intends to continue its efforts to identify greater business opportunities associated with LNG. It also goes in line with the company's strategy of bolstering its business activities along the natural gas value chain including investments in upstream and LNG transportation businesses.
Overview of Freeport LNG Receiving Terminal project (post acquisition)
Location: Freeport, Texas
Project ownership: Freeport LNG Development, L.P.
Freeport LNG Development, L.P. is a Delaware limited partnership. The limited partners are; Freeport LNG Investments LLLP, 45%; Cheniere FLNG, L.P., a wholly owned subsidiary of Cheniere Energy, Inc., 30%; Texas LNG Holdings, a wholly owned subsidiary of The Dow Chemical Company, 15%; and Turbo LNG, 10%.