INTEROIL INKS DEAL WITH JAPANESE PARTNERS

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Gas processing plant to be built in PNG’s Gulf Province

By Eric Tapakau PORT MORESBY, Papua New Guinea (PNG Post-Courier, Jan. 5, 2010) - Laid back Gulf Province is set to become an industrial hub as InterOil partners with Japanese Mitsui Group to build a stripping plant in the province.

The province will soon host a massive PGK1.32 billion (US$450 million) gas condensate stripping plant that will be used to process gas from the world class Elk and Antelope gas fields also located in the province.

Key terms of agreement (KTA) were signed last week between the State through Petromin Holdings PNG Limited, InterOil and Mitsui of Japan showing full commitment by Japan to assist in developing Papua New Guinea’s vast gas resources and at the same time purchasing the products such as liquefied natural gas.

Prime Minister Sir Michael Somare as trustee shareholder of Petromin PNG Ltd performed his last official duties of 2009 by witnessing the KTA between the two companies for a US$450 million lending facility anticipated to cover 100 percent of the remaining costs of the processing and sale of condensate from the Elk and Antelope fields.

The KTA outlines the relationship between InterOil Corporation, Petromin Ltd. and the Mitsui Group. The non binding KTA demonstrates Japanese support for Petromin, the natural resources holding company of Papua New Guinea and InterOil’s upstream development.

"This KTA signing follows a memorandum of understanding that was completed several months ago," Sir Michael said. "And it sets the stage for a binding agreement to be signed upon further negotiations."

Mitsui Group representatives were present for the world record breaking flow test at the Antelope -2 well early last month and the recent signing of InterOil’s LNG project agreement.

The group is one of the largest corporate conglomerates in Japan and one of the largest publicly traded companies in the world. Mitsui Group has interests in LNG and petrochemicals among other industries and is recognized as one of the largest traders in naphtha and high quality petrochemical products.

"We are pleased to have support from Japan in furthering the development of our natural resources," Sir Michael said.

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