BG Group signs heads of agreement for sale of QCLNG stake and new LNG supply
Thursday, Nov 01, 2012
BG Group today announces that it 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 $1.93 billion and the sale of liquefied natural gas (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.
The interests conveyed include a stake in certain upstream tenements and the Train 1 liquefaction facility, as detailed below, but exclude any interest in the Train 2 liquefaction facility, transmission pipeline and QCLNG common facilities.
Under the LNG sale agreement, BG Group will supply CNOOC with 5 million tonnes per annum (mtpa) of LNG for 20 years beginning in 2015, sourced from the Group's global LNG portfolio. Combined with the 3.6 mtpa LNG sale agreement signed with CNOOC in March 2010*, BG Group's total committed LNG sales to China will be 8.6 mtpa - making the company the largest supplier of LNG to the world's fastest growing energy market.
The significant transactions contemplated by the agreement will be conditional on applicable government and regulatory approvals.
BG Group Chief Executive Sir Frank Chapman said: "This agreement will substantially increase our partnership with CNOOC in the QCLNG project. The new LNG sales agreement will also enhance our close relationship with CNOOC by providing material new supplies of natural gas to China. We look forward to building our partnership with CNOOC as we progress towards first LNG from the QCLNG project in 2014."
Sir Frank added: "Equally significant is that this transaction, combined with others recently announced, will provide for an aggregate capital release of $7.6 billion by mid-2013, exceeding the portfolio rationalisation plans we announced in February this year. This progress reflects our commitment to maintain a strong balance sheet and credit rating."
Source: BG Group
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