BG Group completes deal with CNOOC for QCLNG stake and LNG supply

BG Group has completed transactions with China National Offshore Oil Corporation (CNOOC) for the sale of additional interests in the Queensland Curtis LNG (QCLNG) project in Australia for $1.93bn. Under a separate agreement, BG Group will also supply CNOOC with an additional 5mn t/y of LNG for 20 years, beginning in 2015.

 

Under the arrangements, BG Group will sell a further 40% equity stake in the QCLNG project Train 1 liquefaction facility, increasing the Chinese company’s holding from 10% to 50%. CNOOC is also to acquire a 20% interest in the reserves and resources of certain BG Group tenements in the Walloons Fairway region of the Surat Basin, Queensland, increasing its ownership from 5% to 25%. In addition, CNOOC acquires a 25% equity interest in certain other upstream tenements held by BG Group in the Surat and Bowen Basins, Queensland.

 

 

The agreements exclude any interest in the Train 2 liquefaction facility, transmission pipeline and QCLNG project common facilities. BG Group’s Australian business, QGC, remains operator and retains majority ownership of the QCLNG project. In particular, BG Group will have around 74% of its original interest in the upstream resource and related infrastructure; and 100% of the project’s common facilities on Curtis Island (including LNG storage tanks and jetty) and the 540 km natural gas pipeline network linking the gas fields to Curtis Island. Together, these items represent approximately 30% of the estimated 2011–2014 project spend.