CNOOC, BG Group sign 20-year LNG supply deal

13:58, March 25, 2010      

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China National Offshore Oil Corporation (CNOOC), China' s largest offshore oil producer, said Wednesday that it had signed a 20-year liquefied natural gas (LNG) supply deal with Britain's BG Group.

Under the contract, CNOOC will buy 3.6 million tonnes of LNG per year for 20 years from BG Group's Queensland Curtis export plant in Australia, according to a statement jointly released by CNOOC and BG Group.

The total value of the deal, given oil prices were 70 U.S. dollars per barrel, would be approximately 40 billion U.S. dollars, according to BG group.

As the biggest single LNG contract in Australia's history, the deal is the world's first international export contract for LNG out of coal seam methane. And it also marks the first sale into China of LNG from coal seam gas, according to the statement.

Under the agreement, CNOOC will take a 10 percent stake in the first of the two LNG processing units at the BG project, as well as a 5 percent equity stake in some of BG's key coal seam gas fields.

The agreement is conditional on approvals from the Chinese and Australian governments, and on BG Group's making the final investment decision on Queensland Curtis LNG, said the CNOOC.

Source: Xinhua
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