(EnergyAsia, May 8 2012, Tuesday) — Australian upstream company Woodside Petroleum said it has sold a 14.7% stake in the proposed Browse liquefied natural gas (LNG) project to Japan Australia LNG, also known as MIMI Browse Pty Ltd, for US$2 billion.

As part of the deal backdated to January 1 2012, Woodside also said MIMI has signed a long-term agreement to buy 1.5 million tonnes of LNG a year from the Browse project subject to completion of the equity offer. MIMI is an equal joint venture between Mitsui & Co and Mitsubishi Corp.

Based in Western Australia state, Browse will initially produce 12 million tons of LNG a year with the potential to rise to 25 million tons.

The agreement package involves MIMI taking 16% interest in the East Browse joint venture and 8% interest in the West Browse joint venture, giving the Japanese firm an estimated 14.7% interest in the combined project on an assumed unitised basis. Woodside, which remains the operator, said its assumed unitised interest would fall from 46% to 31.3%.

The transaction includes a joint marketing agreement between Woodside and MIMI under which the parties will jointly market co-mingled LNG volumes to the Asian market, primarily Japanese customers.

On completion, MIMI will offer assistance in obtaining competitive financing for Browse’s development with Japanese banks indicating their support.

Separately, Woodside said it has signed a non-binding memorandum of understanding with MIMI’s shareholders, Mitsui & Co and Mitsubishi Corp, which provides for them to jointly or independently progress discussions with Woodside with respect to potential collaboration and alliance on other opportunities globally.

Woodside CEO Peter Coleman said the equity sale and LNG agreements were a strong demonstration of the value of the Browse LNG Development.

“Browse is a world-class resource and the level of interest shown during this process reflects the strong ongoing demand for LNG from premium developments such as this,” he said.

Before the equity sale can be completed, the Browse Joint Venture partners BHP Billiton Petroleum (North West Shelf), BP Developments Australia, Chevron Australia and Shell Development Australia have a period to consider pre-emption over the sale.

The older partners have yet to resolve a dispute over the best location to process the gas while Mitsui & Co and Mitsubishi Corp have not mentioned their preference.