By Narayanan Somasundaram and Tom Bergin
SYDNEY/LONDON, March 6 UK gas producer BG
Group is mulling the sale of a stake in its multi-billion
dollar Queensland natural gas liquefaction facilities, sources
close to the matter said, potentially paving the way for a
restructuring of the region's LNG business.
BG could sell between 15 and 20 percent of the Queensland
Curtis LNG project (QCLNG) and, based on past transactions,
could raise up to $2 billion from the sale, one source said.
The cash would be reinvested in more profitable oil and gas
exploration and production activities.
BG is one of a number of companies including
Santos, Origin Energy and a joint venture
between Royal Dutch Shell and and PetroChina, which are
developing plans to build LNG plants around Gladstone in
The companies have bought huge swathes of land with deep
coal seams from which gas can be extracted and frozen into LNG.
BG's $15 billion Queensland Curtis Island LNG
project is the most advanced with an expected start-up in 2014.
Some analysts have suggested the companies could
co-operate in the planned expansion of the export facilities
over time -- something that may be facilitated if a rival bought
BG owns 93.75 percent of the two liquefaction units, or
'trains', being built at QCLNG. It is also eyeing further
Analysts expected a sell-down as the group usually
holds a lower percentage of the gas liquefaction facilities it
BG has sold small stakes to China's CNOOC and
Japanese utility Tokyo Gas, in addition to stakes in
its Queensland coal seam gas assets. Coal seam gas is also known
as coal bed methane.
The liquefaction facilities usually work on a
tolling basis and so earn low, but steady, utility-type returns.
For example, BG's liquefaction unit, which operates
facilities around the world, made $314 million last year, while
the marketing and trading of LNG earned the UK group $2.4
Since the assets are not especially lucrative,
interests in them are often sold as part of a broader deal
involving a stake in the upstream oil and gas fields that feed
them, suggesting BG could sell a stake in its upstream assets
A BG spokesman said: "We keep all assets in our global
portfolio under review."