* CNOOC to buy 3.6 mtpa of LNG from BG Australia plant
* CNOOC to become equity investor in 1 of the 2 LNG trains
(Adds details, background)
PERTH May 13 China National Offshore Oil Corp
(CNOOC) will buy liquefied natural gas from a proposed BG Group
Ltd BG.L Australian plant, making the UK firm the first
building a coal seam gas-fed LNG plant in Australia to sign a
CNOOC will buy 3.6 million tonnes per annum (mtpa) of LNG
for a period of 20 years from the start-up of BG's Queensland
Curtis Island LNG (QCLNG) project, to be built in the
northeastern of Australia, BG said in a statement.
The Chinese firm will also become a 10 percent equity
investor in one of the two LNG production trains at the planned
development and will buy 5 percent of BG's interests in coal
seam gas reserves and resources of certain tenements in the
Walloons Fairway in Queensland's Surat Basin.
The two companies will participate in a consortium that
will build two LNG ships.
"This agreement is another important milestone in the
development of the Queensland Curtis LNG project," BG Chief
Executive Frank Chapman said in a statement.
The sale is the first out of three proposed coal seam
gas-to-LNG projects on Australia's east coast and signals that
demand for long-term gas supplies is still buoyant despite the
It also shows that lining up overseas customers may not be
as challenging as some analysts have thought.
As well as BG, a joint venture between ConocoPhillips
(ORG.AX) and Origin Energy Ltd (ORG.AX) and another between
Malaysia's Petronas [PETR.UL] and Santos Ltd (STO.AX) are
building similar projects in Queensland.
The deal also marks CNOOC's second LNG investment in Asia.
Last month it signed an commercial agreement with Papua New
Guinea's state-owned Petromin to develop a proposed LNG project
in the Pacific nation.
BG said it was making good progress on the project and the
first phase of development will have a capacity of around 7.4
mtpa of LNG from two production trains. It expects to make a
final investment decision in 2010 and first gas production in
(Reporting by Fayen Wong)