BG Group announces China deal
LNG giant BG Group has announced it has signed a Heads of Agreement (HOA with China National Offshore Oil Corporation (CNOOC) for the sale of its Curtis LNG project for $1.93 billion.
The agreement will also see BG Group supply CNOOC with gas from its LNG portfolio. Under the agreement, BG Group will supply CNOOC with 5 million tonnes per annum (mtpa) of LNG for 20 years beginning in 2015.
The announcement brings BG Group’s total LNG provision to China up to 8.6 mtpa, making the company the world’s largest supplier of LNG to the country.
BG Group Chief Executive Sir Frank Chapman said: “This agreement will substantially increase our partnership with CNOOC in the QCLNG project. The new LNG sales agreement will also enhance our close relationship with CNOOC by providing material new supplies of natural gas to China. We look forward to building our partnership with CNOOC as we progress towards first LNG from the QCLNG project in 2014.”
Under the terms of the HOA:
- CNOOC will acquire a 40% equity interest in QCLNG Train 1, increasing its equity ownership from 10% to 50%;
- CNOOC will acquire a 20% equity interest in the reserves and resources of certain BG Group tenements in the Walloons Fairway region of the Surat Basin, Queensland, increasing its equity ownership from 5% to 25%;
- CNOOC will acquire a 25% working interest in certain upstream tenements held by BG Group in the Bowen Basin, Queensland;
- BG Group and CNOOC will jointly invest in the construction of two LNG ships in China, adding to the two ships already committed under the LNG agreements signed in
March 2010; and,
- CNOOC will have the option to participate as a 25% partner in the first of any potential expansion trains at QCLNG.