13th May 2009 07:00
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News Release |
13 May, 2009
BG Group signs LNG agreement with CNOOC
BG Group today announced that it had signed a liquefied natural gas (LNG) Project Development Agreement with one of China's leading integrated energy companies, China National Offshore Oil Corporation and its affiliates (CNOOC), focused on BG Group's Queensland Curtis LNG (QCLNG) Project in Australia.
The agreement sets out the basis on which:
CNOOC will purchase 3.6 million tonnes per annum (mtpa) of LNG for a period of 20 years from the start-up of QCLNG, which is being developed by QGC - a BG Group business;
CNOOC will purchase 5% of BG Group's interest in the reserves and resources of certain tenements in the Walloons Fairway of the Surat Basin in Queensland;
CNOOC will become a 10% equity investor in one of the two liquefaction trains which will form the first phase of the QCLNG development at Gladstone in Queensland; and
BG Group and CNOOC will jointly participate in a consortium formed to construct two LNG ships in China that would be owned by the consortium.
BG Group and CNOOC intend to complete negotiations and execute fully-termed transaction documents prior to BG Group's final investment decision, expected in 2010, to sanction the QCLNG Project.
The agreement was signed in Beijing on Tuesday, 12 May 2009, by the CNOOC President Fu Chengyu and the BG Group Chief Executive Frank Chapman. The significant transactions contemplated by the agreement will be conditional on applicable government and regulatory approvals.
BG Group and CNOOC have been in partnership in offshore exploration in China since 2006. In 2008, BG Group and CNOOC signed a Memorandum of Understanding under which the two companies agreed to explore opportunities for strategic cooperation.
QCLNG firmly underpinned by BG Group global LNG supply agreements
In June 2007, BG Group signed a 25-year agreement to supply Chile's first LNG import terminal, and in April 2008 BG Group was selected as the LNG aggregator for Singapore for a period of up to 20 years. Upon execution of the fully-termed transaction documents with CNOOC, BG Group's LNG supply commitments with partners and customers in Chile, Singapore and China will account for up to 8.3 mtpa, firmly underpinning development of the two-train first phase of the QCLNG Project.
BG Group Chief Executive Frank Chapman said: "This agreement is another important milestone in the development of the Queensland Curtis LNG Project. It builds on an already strong and productive relationship established with CNOOC. We look forward to working with our CNOOC partners as we drive forward our plans to establish QCLNG in the vanguard of a new world-class LNG industry in Eastern Australia."
BG Group's wholly-owned business, QGC, continues to make good progress with QCLNG. Upstream exploration, appraisal and development activities are advancing and Front End Engineering and Design work is underway. In February 2009, BG Group entered into an agreement with the Queensland Government to acquire a 270 hectare site at North China Bay on Curtis Island near Gladstone. The first phase of the QCLNG project will manufacture around 7.4 million tonnes per annum of LNG from two trains, beginning in 2014.
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Notes to Editors:
BG Group
BG Group plc (LSE: BG.L) is a world leader in natural gas, with a strategy focused on connecting competitively-priced resources to specific, high-value markets. Active in 27 countries on five continents, BG Group has a broad portfolio of exploration and production, Liquefied Natural Gas (LNG), transmission and distribution and power generation business interests. It combines a deep understanding of gas markets with a proven track record in finding and commercialising reserves. For further information visit: www.bg-group.com
CNOOC
The China National Offshore Oil Corporation (CNOOC), founded in 1982, is one of the largest state-owned oil giants in China, as well as the largest offshore oil and gas producer. It is authorized to cooperate with foreign partners for oil and gas exploitation in China's offshore areas. Headquartered in Beijing, it has a total staff of 51,000 with a registered capital of RMB 94.9 billion.
QGC
QGC is a leading and award-winning Australian integrated energy business with a strategy focused on developing its world-class coal seam gas reserves in the Surat Basin and the Bowen Basin for domestic supply, power generation and export as LNG. Founded in 2000 as an explorer, QGC is a BG Group business with more than 300 employees in Queensland. QGC, already a supplier of natural gas to the Australian domestic market, is developing further domestic supply in addition to the Queensland Curtis LNG Project.
QCLNG
Queensland Curtis LNG (QCLNG) is one of Australia's largest capital infrastructure projects, spanning 400 kilometres from the gas fields of the Surat Basin west of Brisbane to Gladstone and nearby Curtis Island. The project is being developed by QGC, a BG Group business, to produce coal seam gas for transportation by pipeline to Gladstone. The gas will be chilled in a liquefaction plant on Curtis Island to form LNG. The project will employ more than 3 000 people during its construction. The final investment decision is expected in 2010, with first shipments of LNG scheduled for 2014.
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There are matters discussed in this media information that are forward looking statements. Such statements are only predictions and actual events or results may differ materially. For a discussion of important factors which could cause actual results to differ from the forward looking statements, refer to BG Group's annual report and accounts for the year ended 31 December 2008. BG Group does not undertake any obligation to update publicly, or revise, forward looking statements, whether as a result of new information, future events or otherwise, except to the extent legally required.
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