CNOOC in Australian LNG tie up with BG Group

China National Offshore Oil Corp (CNOOC; 0883.HK, CEO.NYSE) has signed liquefied natural gas (LNG) supply contract with BG Group (BG.LSE) that could be worth up to US$80 billion over a 20-year period, Bloomberg reported. From 2014, BG will provide 3.6 million metric tons of LNG each year from its project in Queensland, Australia, paying US$40-70 a barrel. Australian Energy Minister Martin Ferguson said it was the country’s biggest ever company-to-company LNG deal in volume terms. CNOOC will receive a 10% stake in the first LNG processing unit and reimburse BG for 10% of the development costs. It will also take a 5% stake in some of BG’s gas fields in Queensland. CNOOC Chairman Fu Chengyu said the company plans to import 8 million metric tons of LNG into China this year. He added that existing long-term LNG supply deals are worth 16 million metric tons per year.