Chinese company commits to Queensland LNG project

CNOOC, a China-based energy company, has for an undisclosed sum, agreed to buy 3.6m tonnes a year of LNG for 20 years from the Queensland Curtis LNG (QCLNG) project, BG Group said in a statement.

It will also purchase a 5% stake in specific tenements of Queensland’s Surat Basin and a 10% stake in one of two liquefaction trains.

The two parties signed a project development agreement in Beijing on May 12, BG Group said.

“This agreement is another important milestone in the development of the Queensland Curtis LNG project,” BG Group chief executive Frank Chapman said.

“We look forward to working with our CNOOC partners as we drive forward our plans to establish the QCLNG in the vanguard of a new world-class LNG industry in eastern Australia.”

Queensland Gas Company, BG Group's Australian unit, was “making good progress” with the Queensland Curtis LNG project, the energy company said.

The first phase of the QCLNG project is expected to generate about 7.4m tonnes of LNG annually, starting in 2014.

BG Group and CNOOC plan to complete talks and sign fully-termed transaction documents before BG Group’s final investment decision on the project, which it expects to make next year.

Last year, the two companies entered a memorandum of understanding to explore opportunities for strategic cooperation.