Ophir in $1.3 bln deal with Temasek unit for Tanzania gas

Reuters

* Sells 20 pct stake in Tanzanian blocks to Singapore firm

* Shares in Britain's Ophir soar 16 pct

By Sarah Young

LONDON, Nov 14 (Reuters) - Britain's Ophir Energy agreed a $1.3 billion sale of a stake in Tanzanian gas fields,bringing in a unit of Singapore's Temasek Holdings to help funda development project in the latest Asian investment in EastAfrica's gas sector.

Ophir, whose shares soared 16 percent after the announcementof the long-awaited deal, said last month a sale process wasunder way with Indian state-run gas company GAIL inthe running as a potential buyer.

The Tanzanian fields that Ophir discovered with its partnerBG Group are its prize assets, estimated to hold 15trillion cubic feet of gas.

Ophir said on Thursday it would sell a 20 percent interestin Tanzanian Blocks 1, 3 and 4 to Pavilion Energy, owned bySingapore state investor Temasek, for an initial $1.25 billionplus a further contingent consideration of $38 million.

The development of the liquefied natural gas (LNG)facilities required to exploit the fields will cost an estimated$10 billion, prompting Ophir, a company worth about $2 billion,to bring in a deep-pocketed partner.

Shares in Ophir gained 16 percent to 381.2 pence, theirhighest since August, topping Britain's mid-cap index.The company's stock had slipped at the time of its half-yearresults in August on a lack of progress on a deal.

VSA analyst Dougie Youngson said the deal was "verypositive" for the company, which had been talking about bringingin partners for over a year.

"Ophir is now very well funded for its future explorationprogramme and has now proven it can identify and complete atransaction," he said.

Ophir retains a 20 percent stake in the three blocksfollowing the deal with Pavilion. It also has majority stakes intwo other exploration areas in Tanzania and exploration assetselsewhere in Africa, in Kenya and Equatorial Guinea.

"The sale is consistent with our strategy of adding value inthe exploration and appraisal phase of the exploration andproduction cycle, monetising that value at the appropriate timeand recycling that capital into further value creatingopportunities," Ophir chief executive Nick Cooper said in astatement.

GAS-HUNGRY ASIA

Analysts had expected a company from gas-hungry Asia, whichwill be the main customer for East Africa's gas, to emerge as apartner for the project following previous interest from Asianinvestors in other deals in the region.

This year, Italy's Eni sold a 20 percent stake inits Mozambique offshore gas project to China National PetroleumCorp for $4.21 billion.

India's Oil and Natural Gas Corp agreed in Augustto buy a 10 percent stake in a gas field in Mozambique fromAnadarko for $2.64 billion.

Temasek Holdings set up Pavilion earlier this yearto help secure energy supply for the city-state as Singaporeaspires to become an LNG trading hub.

Ophir said it expected the deal, which is subject togovernmental consent and approval by Ophir's shareholders, tocomplete in the first quarter of 2014.

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