BG Group has signed binding agreements with China National Offshore Oil Corporation (CNOOC) for the sale of certain additional interests in the Queensland Curtis LNG (QCLNG) project in Australia for $1.93bn and for the supply of an additional 5 Mt/yof LNG. Additionally, CNOOC will reimburse BG Group for its share of QCLNG project expenditure incurred from 1 January 2012.
BG Group has signed a Heads of Agreement (HOA) with China National Offshore Oil Corporation (CNOOC) for the sale of certain interests in the Queensland Curtis LNG (QCLNG) project in Australia for US$1.93bn and the sale of LNG from BG Group's global LNG portfolio. Fully-termed transaction agreements are expected to be executed in the first half of 2013, and upon closing, CNOOC will reimburse BG Group for its share of QCLNG project capital expenditures incurred from 1 January 2012.
Under the terms of the HOA:
• CNOOC will acquire a 40% equity interest in QCLNG Train 1, increasing its equity ownership from 10% to 50%;
• CNOOC will acquire a 20% equity interest in the reserves and resources of certain BG Group tenements in the Walloons Fairway region of the Surat Basin, Queensland, increasing its equity ownership from 5% to 25%;
• CNOOC will acquire a 25% working interest in certain upstream tenements held by BG Group in the Bowen Basin, Queensland;
• BG Group and CNOOC will jointly invest in the construction of two LNG ships in China, adding to the two ships already committed under the LNG agreements signed in March 2010; and,
• CNOOC will have the option to participate as a 25% partner in the first of any potential expansion trains at QCLNG.
Under the LNG sale agreement, BG Group will supply CNOOC with 5 Mt/year of LNG for 20 years beginning in 2015, sourced from the Group's global LNG portfolio. Combined with the 3.6 Mt/year LNG sale agreement signed with CNOOC in March 2010, BG Group's total committed LNG sales to China will be 8.6 Mt/year.