Nexus Says Crux Sale Process May Be Clear by End-Jan

By Angela Macdonald-Smith

Dec. 10 (Bloomberg) -- Nexus Energy Ltd., developer of the proposed Crux natural gas liquids project off northern Australia, said it may have “clarity” on efforts to sell a stake in the venture by the end of January.

A “range of international parties” have shown “very strong” interest in Crux and Nexus may sell anything from small stakes to two companies to a large share, possibly including operating control, Ian Tchacos, managing director of the Melbourne-based company, said today in a briefing document lodged with the Australian stock exchange.

Nexus in October hired Deutsche Bank AG to manage a formal process for the sale of a stake in Crux after Mitsui & Co. scrapped a plan to buy an interest for $255 million. The Crux venture, which includes Osaka Gas Co., was due to approve the project for development this quarter to meet a scheduled start- up date in the first half of 2011.

The sales process “gives us confidence that we will be able to introduce a quality partner,” Tchacos said in the document. The board “would consider any offer that represents appropriate value and was in the best interest of our shareholders,” including an offer for the company, he said.

Nexus, which has slumped 74 percent in Sydney trading in the past six months, gained 8.4 percent to 45 Australian cents, after earlier falling as low as 40 cents. The gain beat a 3.2 percent advance in the exchange’s benchmark energy index.

Echuca Shoals

The gas well development part of the Crux gas liquids project may cost between $650 million and $700 million to build, Nexus said. The company has previously estimated the total cost of the project at about $1.2 billion, including processing on board a production ship.

Some parties have expressed interest in investing in Nexus’s 66 percent-owned Echuca Shoals gas venture off northern Australia, Tchacos said. Any transaction should provide funding to drill an appraisal and exploration well, possibly in late 2009, he said.

Nexus’s 100 percent-owned Longtom gas project off the southeast coast is due to start up by the middle of next year, providing cash flow, Tchacos said.

To contact the reporter on this story: Angela Macdonald-Smith in Sydney at amacdonaldsm@bloomberg.net