BG, CNOOC order LNG carriers

BG Group, a major British energy company, will construct two LNG carriers jointly with China National Offshore Oil Corp. (CNOOC) for assignment to the Queensland Curtis LNG (QCLNG) project it is now developing in Australia.

The two LNG carriers, to be owned jointly by the two parties, will be built at a Chinese shipyard and will be the first LNG carriers to be built in China since China LNG Transport (CLNG) ordered five units from Hudong-Zhonghua Shipbuilding. QCLNG will start operations in 2014 and is scheduled to produce around 7.4 million tones per annum of LNG from two trains. CNOOC will purchase 3.6 million tonnes per annum for a period of 20 years from the start-up of the project.

In addition, CNOOC also agreed with BG to obtain 5% of BG’s interest in the reserves/resources of certain tenements in the Walloons Fairway of the Surat Basin in Queensland, and become a 10% equity investor in one of the two trains in the QCLNG development project. Based on the agreement this time, BG Group and CNOOC intend to complete negotiations and execute fully-termed transaction documents prior to BG’s final investment decision, expected in 2010, to sanction the QCLNG project.

Other than the latest deal, BG earlier agreed to supply 1.7 million tonnes of LNG annually to Chile for 25 years and 3 million tonnes per year to Singapore for 20 years from QCLNG.