The agreement sets out that CNOOC will purchase 3.6 million tonnes per annum (MMt/a) of LNG for a period of 20 years from the start up of QCLNG as well as 5 per cent of BG’s interest in the reserves and resources of certain tenements in the Walloons fairway of the Surat Basin.
CNOOC will also become a 10 per cent equity investor in one of the two liquefaction trains; and, BG and CNOOC will jointly participate in a consortium formed to construct two LNG ships in China that would be owned by the consortium.
The two companies intend to complete negotiations and execute fully-termed transaction documents prior to BG‘s final investment decision to sanction the QCLNG Project, which is expected in 2010.
Progress with the QCLNG continues to accelerate. Upstream exploration, appraisal and development activities are advancing and front-end engineering and design work is underway. The first phase of the QCLNG Project will manufacture around 7.4 MMt/a of LNG from two trains, beginning 2014. It also includes the development of a 380 km pipeline linking BG/QGC’s Surat Basin tenements to a Curtis Island port site.
The project has potential for expansion to 12 MMt/a subject to additional gas reserves.
