Australia's Woodside Petroleum on Tuesday said it had sold a minority stake in its proposed Browse gas export project to a Japanese consortium for U.S. $2 billion.
Woodside is the major equity holder and operator of the Browse LNG Development in Western Australia and offloaded a 14.7 percent interest to Japan Australia LNG, a joint venture of the Mitsui and Mitsubishi trading houses.
"Browse is a world-class resource and the level of interest shown during this process reflects the strong ongoing demand for LNG," said Woodside chief executive Peter Coleman, referring to liquefied natural gas.
The deal will see Woodside's interest fall from 46 percent to 31.3 percent, but it will remain the project's operator.
Shares in the company ended 3.67 percent higher at Aus$36.20 (U.S. $37.38) on the news.
Woodside said it also struck a long-term sales and purchase deal with the Japanese venture, known as MIMI, for 1.5 million tons per year from the Browse project, subject to completion of the equity sale.
The oil giant said the price was "confidential but is in line with traditional Asian pricing for conventional LNG projects".
Under the deal, Woodside and MIMI would jointly market LNG from Browse to Asian customers, "primarily" within Japan, and Japanese banks had indicated they would be prepared to help finance the project, Woodside added.
The parties had also entered into a non-binding memorandum of understanding allowing for "potential collaboration and alliance on other opportunities globally".
Valued at some US$30 billion, Browse is a joint venture with BHP Billiton, BP, Chevron and Shell, and Woodside said its partners would have a period to consider a counter-offer to the Japanese investment.
It is among around a dozen gas export terminals planned in Australia, which stands to eclipse Qatar as the world's largest exporter of LNG by the end of the decade, driven by global demand for cleaner energy sources.
Japan is heavily involved in Australia's burgeoning LNG sector and the major customer for its gas as it searches for alternatives to nuclear following last year's crisis at the crippled Fukushima plant.
Tokyo-based energy firm Inpex and France's Total in January unveiled a huge US$34 billion LNG project in the Browse precinct with annual output of 8.4 million tons, serving Japanese and Taiwanese clients.
West Australian premier Colin Barnett said the "significant" commitment from Japan -- the world's biggest LNG importer -- was a vote of confidence in Browse.
Woodside's Aus$14.9 billion Pluto project began production ready for shipment to Japan on Monday in a milestone the company said "cements Woodside's position as a major supplier of LNG to the Asia-Pacific region".
Australia currently exports about 20 million tons of gas per annum, primarily to Asian countries, and the government has forecast total national capacity to quadruple in coming years to more than 80 million tons.
Woodside has said Browse, which comprises three offshore deep-water gas and condensate fields 425 kilometers (263 miles) north of Broome, will contribute more than Aus$50 billion to the Australian economy.
A final investment decision on the project, which is facing a host of technical and environmental hurdles, is due in the first half of 2013, with initial shipments planned in 2017 and capacity of 12 million tons per annum.
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