Following the contract, BG Group will supply the LNG from an Australian energy project near Gladstone in Queensland, which is being developed by its wholly-owned Australian subsidiary, QGC. In addition, the group may also supply CNOOC from its global LNG portfolio. The deal is said to be the first sale of LNG from coal seam gas into China.
In addition, as part of the parallel agreements between the companies, the Chinese oil company will acquire a 5% equity interest in the reserves and resources of certain tenements of BG Group in the Surat Basin of Queensland. It will also hold a 10% interest in an LNG processing unit.
Frank Chapman, chief executive of BG Group, said: “These agreements are a landmark development in the relationship between our two companies, building on what is already a close and productive partnership in deep water exploration, offshore China. CNOOC is a highly accomplished company and we look forward to working together as we bring this new ground-breaking LNG project to fruition.”
