(EnergyAsia, March 1 2011, Tuesday) — China Petrochemical Corporation (Sinopec) has agreed to acquire a 15% stake in Australia Pacific LNG Pty Ltd and to purchase liquefied natural gas (LNG) over a 20-year contract, expected to start in 2015.

The value of the stake and the contracts were not mentioned in a statement issued by Australia Pacific LNG Pty Ltd, which were previously equally owned by ConocoPhillips of the US and Origin Energy of Australia. Their respective stakes would be reduced to 42.5% each with Sinopec’s entry.

Sinopec has agreed to import up to 4.3 million tonnes per year of LNG for 20 years from the A$35 billion project in Queensland state. (US$1=A$0.99).

Jim Mulva, chairman and CEO of ConocoPhillips, Kevin McCann, chairman of Origin Energy acting on behalf of Australia Pacific LNG, and Su Shulin, President of Sinopec, signed the Heads of Agreement in Beijing last week.

Australia Pacific LNG and Sinopec will soon incorporate the non-binding key commercial terms into binding agreements.

In welcoming Sinopec as a partner and foundation customer, Mr Mulva said the agreement was an important milestone for Australia Pacific LNG as it will accelerate the project’s development.

Mr McCann said: “This agreement with Sinopec is testament to the scale and quality of the Australia Pacific LNG project, which is based on world-class coal seam gas reserves and resources in Queensland.”

Mr Su said: “This will help Sinopec diversify its natural gas supply and meet the rapidly increasing demand of customers in China.”

Australia Pacific LNG Pty Limited is developing coal seam gas resources in Queensland’s Surat and Bowen Basins over a 30-year period, as well as building a 450-km transmission pipeline, and a multi-train LNG facility on Curtis Island located Gladstone.