CNOOC inks $1.9bn LNG deal

China National Offshore Oil Corporation (CNOOC) will pay US$1.93 billion to UK-based BG Group (BG.LON) to supply liquefied natural gas and to take a greater share in one of BG’s Australian LNG project, Bloomberg reported. The deal with state-run CNOOC, the unlisted parent company of Cnooc Ltd (CEO.NYSE, 0883.HKG), will make BG the largest supplier of LNG to the mainland. BG will supply CNOOC with 5 million metric tons of LNG for 20 years starting in 2015. CNOOC will also boost its share in BG’s Queensland Curtis operation from 10% to 50% as part of the deal. BG said in May that costs to build an LNG export project rose 36% to US$20.4 billion as the Australian dollar appreciated and material expenses increased. Chinese imports of liquified natural gas are expected to rise to 47 billion cubic meters from roughly 16.5 billion cubic meters in 2011, according to the International Energy Agency.