BG Group Sells Stake in Queensland Curtis LNG Project

BG Group has said that it has agreed to sell stake in Queensland Curtis LNG (QCLNG) project in Australia for $1.93 billion to CNOOC. The British group also inked a deal to supply LNG from its global LNG portfolio.

As per the terms of agreement, CNOOC will acquire a 40% equity interest in QCLNG Train 1, increasing its equity ownership from 10% to 50%. The Chinese energy giant will also 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%.

The agreement further says that 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 finally CNOOC will have the option to participate as a 25% partner in the first of any potential expansion trains at QCLNG.

Under the LNG sale agreement, BG Group will supply CNOOC with 5 million tonnes per annum (mtpa) of LNG for 20 years beginning in 2015. Combined with the 3.6 mtpa LNG sale agreement signed with CNOOC in March 2010, BG Group’s total committed LNG sales to China will be 8.6 mtpa.