CIC eying stake in BG Australia LNG project - sources

HONG KONG/SYDNEY, April 27 Thu Apr 26, 2012 10:44pm EDT

HONG KONG/SYDNEY, April 27 (Reuters) - BG Group Plc has held talks with China Investment Corp on the sale of an equity stake in the British gas producer's Australian LNG facilities, sources familiar with the matter told Reuters, a deal that could be worth $2 billion.

BG and CIC started discussions about two months ago, one of the sources said, although it was not clear whether the $410 billion sovereign wealth fund's interest was still active.

The sources added that first round bids were due in early June.

Others in the fray include China's CNOOC Group, which owns a 5 percent stake in the project, Osaka Gas Co Ltd, Tokyo Gas Co Ltd, Mitsui & Co Ltd Marubeni Corp and Qatar Petroleum, the sources said. They declined to be identified as talks are confidential.

BG is among many global oil majors developing $200 billion worth of liquefied natural gas export projects in Australia. Developers such as BG are shedding some stakes to free up cash for other projects.

BG, which owns a 93.75 percent stake in the $15 billion Queensland Curtis Island LNG project, is offering a 15-20 percent stake, sources previously told Reuters. The stake could be worth up to $2 billion, sources said.

BG had Initially planned to sell an equity stake in the project and to also offer the buyer a long-term gas off-take agreement. Under the revised deal, BG has dropped the off-take agreement, said the sources.

They said BG would discuss off-take agreements only after the equity was sold, and the off-take would most likely be offered in expansion of the project.