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Talisman strikes joint venture with Mitsubishi

John Manzoni, president and Chief Executive Officer of Talisman Energy answers questions at a news conference after the company's annual general meeting in Calgary, Alberta, May 4, 2011.

TODD KOROL/TODD KOROL/REUTERS

Talisman Energy Inc. has embarked on a partnership with Mitsubishi Corp. to develop natural gas properties in Papua New Guinea, the second recent move by the Japanese company to secure gas assets from a Canadian company.

Calgary-based Talisman said Wednesday that Mitsubishi will pay about $280-million (U.S.) to form a joint venture on nine licences in the country. Talisman will hold about a 40 per cent stake in the licences, while Mitsubishi will hold 20 per cent.

The companies are looking to export about three million metric tonnes per year of liquefied natural gas.

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Mitsubishi "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," Talisman vice-president Paul Blakeley said in a statement.

LNG is seen as a way to globalize the natural gas market, as the crude oil market has been for decades. By contrast, natural gas trade has been limited to markets that can be served by pipelines, such as North America and Europe.

Last week, Mitsubishi bought a 40 per cent interest in the Cutbank Ridge Partnership from Calgary-based Encana for $2.9-billion.

The partnership holds about 409,000 net acres of Encana's undeveloped Montney-formation natural gas lands in northeastern B.C. with proved undeveloped reserves of approximately 900 billion cubic feet of natural gas equivalent.

Mitsubishi, an integrated Japanese global business enterprise, is looking to capitalize on Asia's hunger for cheap energy sources and high demand in Japan after its nuclear crisis shut down nearly all the nation's reactors for tougher checks, sending fuel imports surging.

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