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CNOOC signs coal seam gas LNG deal with BG Group

LNG Industry,

China National Offshore Oil Corp. (CNOOC) has signed an agreement with BG Group of Australia for the purchase of 3.6 million tpy of LNG for the next 20 years. The deal is worth approximately US$ 40 billion. The two companies have co-operated together on projects for the past four years. CNOOC will purchase 5% of BG’s interest in coal seam gas reserves at Surat Basin in Queensland, and will also become a 10% equity investor in QCLNG liquefaction Train 1. The two companies will form a consortium to construct two LNG ships.

The deal is the first fully termed sale and purchase agreement for the supply of LNG from coal seam gas. There have been estimates that Queensland holds enough coal seam gas to power the state for over 1000 years.

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