| China National Offshore Oil Corp (CNOOC) yesterday signed a 20-year deal with BG Group Plc to buy 3.6 million tons liquefied natural gas annually.
UK-based BG Group will supply CNOOC with LNG from its Queensland Curtis facility on Curtis Island in Australia. Shipments are due to start from 2014 after the Chinese, Queensland and Australian authorities have given their approval.
The deal is the biggest company-to-company LNG contract done in Australia in volume terms, said Martin Ferguson, Australia's Resources and Energy Minister.
Based on a 20-year deal worth A$50 billion (US$45 billion) PetroChina has signed with Exxon Mobil for 2.3 million tons of LNG per annum from the Gorgon field northwest Australia, market watchers said the CNOOC contract could be worth up to A$80 billion.
CNOOC will continue to seek more green energy through further cooperation with international companies and aims to diversify energy sources from traditional oil and gas, said President Fu Chengyu. He said earlier this month the company plans to sign three term contracts to purchase LNG this year.
The preliminary deal with BG Group was first announced in May. Under the deal, CNOOC will also acquire a 5 percent equity interest in certain BG Group gas reserves in Queensland, with total book value at about US$270 million, and 10 percent of an LNG processing train, BG Group said in a statement.
CNOOC and the BG Group will also have two LNG ships built in China. BG Group will make the final decision on the Queensland LNG project later this year.
So far CNOOC, the nation's third-biggest oil and gas company, has signed long-term contracts for the supply of 320 million tons of LNG.
China wants to triple the consumption of cleaner natural gas to 300 billion cubic meters by 2020, or 10 percent of its total energy needs. |
