Australian Minister for Resources and Energy Gary Gray Monday welcomed the signing of a binding liquefied Nat Gas (LNG) agreement that secures US$1.93-B of investment in Australian resources.
BG Group, PINK:BRGXF, LN:BG, 1 of the world’s largest LNG companies, and the China National Offshore Oil Corporation (CNOOC) NYSE:CEO, Monday signed binding agreements in which CNOOC will acquire a greater interest in the first of two production trains of the Queensland Curtis LNG Project (QCLNG) and a greater stake in upstream tenements.
QCLNG is on schedule to be the world’s 1st project to produce LNG from natural gas out of coal seams, with first exports due next year. The 20-B Australian Dollars (US$20.6-B project is more than half complete, with the roof having already been raised on one of the 2 LNG tanks on Curtis Island off Gladstone on Queensland’s central coast.
Mr. Gray, who attended a signing ceremony in Brisbane attended by BG Group CEO Chris Finlayson and CNOOC Group Chairman Wang Yilin, said Monday’s agreement reaffirmed Australia as a leader in supplying cleaner hydrocarbon energy to global markets.
An initial off-take agreement in Y 2010 between BG Group and CNOOC, of 3.6-M tonnes a year for 20 yrs from Y 2014, remains Australia’s largest LNG contract between two single companies.
“Last month, following the Prime Minister’s successful visit to China, our two countries announced a strategic partnership and the supply of minerals and petroleum, and increasingly LNG, is a key plank in our broader relationship,” Gray said.
“Ours is a mutually beneficial partnership. China is the world’ s fastest growing energy market, with huge demand for LNG, at the same time as Australia is poised to become one of the world’s top two LNG exporters,” he added.
Gray said the future of LNG production is in Australia and the latest agreement demonstrates “we are increasing our capabilities in LNG construction and operation through a focus on innovation and the right approach from government and industry.”
As part of the agreements signed Monday, which build on a heads of agreement signed in October 2012, BG Group will supply CNOOC with an extra 5 million tonnes of LNG a year from 2015 from its global portfolio. CNOOC will also acquire a 20 percent interest in the reserves and resources of certain BG Group tenements in the Walloons Fairway region of the Surat Basin, Queensland.
BG Group’s Australian business QGC Pty Limited remains operator and retains majority ownership of QCLNG.
QCLNG involves expansion of natural gas production in the Surat Basin and construction of a 540 km pipeline network to Gladstone and an LNG plant.
More than 8.7-B Australian Dollars (US$8.9-B), or 76% of the 11.4 Billion Australian dollars spent so far on the project, has been invested with Australian firms since 1 January 2010.
The project currently employs more than 9,000 people.