The restructuring consists of the conversion of LNG Limited's $A2.4 million shareholder loan to Gas Link into 47 million GLG shares, a $A2.5 million capital injection for the issue of 33 million Gas Link shares and a third party capital injection of $A5 million for 50 million GLG shares.

Following the restructure, the company will hold 100 million shares, or 66.7% of the issued capital, in Gas Link.

LNG Limited said it intends for Gas Link to become self funding and has proposed an initial public offering of Gas Link's share on the Australian bourse in 2008 subject to market conditions.

Gas Link has a 10% stake in PRL 10 and PPL 240 through its acquisition of Texan explorer Gedd PNG, which is awaiting PNG Government approval.

PRL 10 contains the Uramu gas field which has estimated recoverable gas reserves of 370 billion cubic feet while Oil Search is drilling the Korobosea-1 exploration well in PPL 240.

In the event of a gas discovery, the estimated recoverable reserves at Korobosea is about 414bcf while an oil find could yield reserves of 96.5 million barrels.

Gas Link also owns a 20% stake in Papua Petroleum, which holds four licences in PNG's Western province that are the subject of negotiations with a major party to fund a seismic and drilling program through a farm-in.

Gas from these licences may be sourced to feed LNG Limited's proposed LNG plant in PNG.

Funds from the $A7.5 million capital injection will be used to fund Gas Link's share of drilling the Korobosea-1 well and retain its 20% stake in Papua Petroleum by contributing up to $A3 million to Papua Petroleum's proposed $A15 million IPO on the Australian bourse.

It will also be used to fund Gas Link's working capital requirements, potential IPO costs and ongoing identification and investment in prospective gas exploration and production opportunities.