(EnergyAsia, February 27 2012, Monday) — Canadian upstream company Talisman Energy Inc said it has sold stakes in nine of its exploration licences in Papua New Guinea’s onshore Western Province to Japan’s Mitsubishi Corporation (MC) for US$280 million.

Talisman said the farmout deal is effective January 1 2012, subject to approvals by government and joint venture partners, and will be paid in the form of a capital carry.

Upon approval, Talisman said it will reduce its average stake in the nine licences to 40% while MC will own an average of 20%.

The partners will work towards aggregating natural gas from the province with a view to developing it into liquefied natural gas (LNG) for export at the rate of three million metric tonnes per year.

Paul Blakeley, Talisman’s executive vice-president for International Operations East, said:

“MC brings extensive experience in LNG development and marketing and I am confident they will be a key success factor in helping us unlock the value of our Papua New Guinea assets.”

With a presence in PNG since 2001, Talisman secured onshore licences of the Papuan Foreland in 2009 and now has a portfolio comprising interests in nine petroleum prospecting licences (PPLs) and five petroleum retention licences (PRLs), covering 13.7 million acres.

As one of the most active explorers in PNG over the past two years, Talisman said it has participated in a gas discovery at Ubuntu in PRL 28 and the successful appraisal of the Stanley and Elevala gas discoveries in PRL 4 and PRL 21, respectively. Talisman intends to commence a four-well drilling program on PPLs 235 and 261 during 2012, as well as ongoing appraisal in PRL 21.

MC has held interests in LNG operations since 1969 and currently participates in nine major LNG projects in addition to its extensive exposure to downstream marketing and LNG tanker activities. Most recently, it started construction of the Donggi-Senoro LNG project in Indonesia as project lead in planning and operation.