(EnergyAsia, May 13 2013, Monday) — UK-based natural gas company BG Group PLC said it has signed new agreements with China National Offshore Oil Corporation (CNOOC) pertaining to the Queensland Curtis LNG (QCLNG) project in Australia.

As part of the new deal, BG Group will sell “certain interests” in upstream coal seam gas tenements in Australia and a further 40% stake in the LNG’s project Train 1 liquefaction facility for US$1.93 billion.

The Chinese state firm, which now owns a 10% stake in Train 1, has also agreed to reimburse BG Group for its share of QCLNG project expenditure incurred since January 1 2012.

CNOOC will 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 to 25% from 5%. CNOOC will acquire a 25% equity interest in certain other upstream tenements held by BG Group in the Surat and Bowen Basins, Queensland.

The UK firm will supply CNOOC with a further five million tons/year of LNG for 20 years from 2015, sourced from the group’s global portfolio.

The two companies 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. CNOOC will have the option to participate up to 25% in one of the potential expansion trains at QCLNG.

BG Group said its Australian business QGC Pty Limited will remain operator and retain majority ownership of the QCLNG project.

At last week’s signing ceremony in Brisbane, BG Group CEO Chris Finlayson said:

“These agreements extend our strong relationship with CNOOC, which spans not only LNG but also exploration offshore China and production in the UK Continental Shelf through participation in the large Buzzard oil field.

“As a foundation partner in QCLNG, CNOOC was among the first to recognise the value and strategic importance of this world-first project – a vision that is now coming to fruition as we move towards first LNG in 2014.

“Combined with the 3.6 million tonnes per annum (mtpa) LNG sale agreement signed with CNOOC in 2010, BG Group now has total committed volumes to China of 8.6 mtpa which will make the Group the largest supplier of LNG to the world’s fastest growing energy market.

“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; where 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.”