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Chinese company invests additional $2b into QCLNG projects

Wang Yilin of China National Offshore Oil Corporation and BG Group Chief Executive Chris Finlayson shake on the QCLNG deal. Photo Contributed
Wang Yilin of China National Offshore Oil Corporation and BG Group Chief Executive Chris Finlayson shake on the QCLNG deal. Photo Contributed Contributed

A CHINESE government corporation has stepped up its stake in Gladstone's LNG industry, signing a $2 billion deal for additional interests in the Queensland Curtis LNG (QCLNG) project.

QCLNG developer BG Group announced the deal with China National Offshore Oil Corporation (CNOOC) on Monday.

It will net CNOOC an extra 5 million tonnes of LNG a year, and boosts the corporation's stake in certain QCLNG interests to up to 50%.

At a signing ceremony in Brisbane, BG Group chief executive Chris Finlayson said CNOOC was a foundation partner in QCLNG, and among the first to recognise the value and strategic importance of the $20 billion Curtis Island project.

"This (is a) world-first project - a vision that is now coming to fruition as we move towards first LNG in 2014," he said.

Mr Finlayson said the new commitment for LNG supply to the corporation will make QCLNG the largest supplier of LNG to the world's fastest growing energy market.

It's also on schedule to be the world's first project to produce LNG from coal seam gas, with first exports due next year.

"More broadly, the agreements expand our strong LNG position in the Asia-Pacific region, where we are on schedule with our LNG export project on Curtis Island in Queensland," he said.

"We have signed long-term LNG sales contracts with customers in China, Japan and India; and, where we will soon begin importing LNG into Singapore through our position as sole gas market aggregator," Mr Finlayson said.

CNOOC will also reimburse BG Group for its share of QCLNG project expenditure incurred from the start of last year.

In return, it secures a 50% share in QCLNG Train 1, as well as shares in upstream assets.

BG Group's Australian business QGC remains operator and retains majority ownership of the QCLNG project, maintaining 74% of its original interest in the upstream resources and infrastructure.

It also maintains full ownership of "common facilities" on Curtis Island and the 540 kilometre natural gas pipeline network linking gas fields to Gladstone Harbour.

A spokesman for QGC said the deal didn't impact on whether the QCLNG project expanded to a third "train", or production unit, on Curtis Island.

"For the time being we are focused on developing two trains," he said.

"A third train depends on continued exploration of our Queensland tenements which cover about 30,000 square kilometres."

Topics:  bg group china foreign investment gladstone lng queensland curtis lng project


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