Oil report

UPDATE 1-BG to export first Australian LNG cargo to China

(Recasts to focus on first export to China, adds background, details)

LONDON, Dec 29 (Reuters) - Britain’s BG Group is preparing to deliver a first commercial liquefied natural gas (LNG) cargo to China from its new $20.4 billion Queensland Curtis LNG project in Australia, a company spokesman said.

The gas producer has been loading the Methane Rita Andrea vessel at its Gladstone facility since Sunday, BG said, and the tanker is expected to start its journey to China shortly.

A second vessel, the Methane Mickie Harper, is expected at Gladstone for loading in the first week of January, BG said.

The British energy firm is looking to its Queensland Curtis project to help to turn around its fortunes as it has been hit by LNG production troubles in Egypt and a slump in oil prices.

BG demonstrated the value of the project earlier this month when it sold the pipeline feeding the facility to Australia’s APA Group for $5 billion, a huge premium to its $1.6 billion book value.

The pipeline connects BG’s natural gas fields in southern Queensland to the export facility and BG said it would pay APA an annual tariff for use.

The Queensland export facility, which is targeting the Asian market and took four years to build, is expected to reach a plateau production level of 8 million tonnes of LNG a year in 2016.

A second export train is planned to start up in the third quarter of 2015, BG said. (Reporting by Karolin Schaps; editing by Jason Neely and Jane Merriman)