BG Group signs LNG agreement with CNOOC - QGC
BG Group signs LNG agreement with CNOOC - QGC
BG Group signs LNG agreement with CNOOC - QGC
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News Release<br />
13 May, 2009<br />
<strong>BG</strong> <strong>Group</strong> <strong>signs</strong> <strong>LNG</strong> <strong>agreement</strong> <strong>with</strong> <strong>CNOOC</strong><br />
<strong>BG</strong> <strong>Group</strong> today announced that it had signed a liquefied natural gas (<strong>LNG</strong>) Project<br />
Development Agreement <strong>with</strong> one of China’s leading integrated energy companies, China<br />
National Offshore Oil Corporation and its affiliates (<strong>CNOOC</strong>), focused on <strong>BG</strong> <strong>Group</strong>’s<br />
Queensland Curtis <strong>LNG</strong> (QC<strong>LNG</strong>) Project in Australia.<br />
The <strong>agreement</strong> sets out the basis on which:<br />
• <strong>CNOOC</strong> will purchase 3.6 million tonnes per annum (mtpa) of <strong>LNG</strong> for a period of 20<br />
years from the start-up of QC<strong>LNG</strong>, which is being developed by <strong>QGC</strong> – a <strong>BG</strong> <strong>Group</strong><br />
business;<br />
• <strong>CNOOC</strong> will purchase 5% of <strong>BG</strong> <strong>Group</strong>’s interest in the reserves and resources of<br />
certain tenements in the Walloons Fairway of the Surat Basin in Queensland;<br />
• <strong>CNOOC</strong> will become a 10% equity investor in one of the two liquefaction trains which<br />
will form the first phase of the QC<strong>LNG</strong> development at Gladstone in Queensland; and<br />
• <strong>BG</strong> <strong>Group</strong> and <strong>CNOOC</strong> will jointly participate in a consortium formed to construct two<br />
<strong>LNG</strong> ships in China that would be owned by the consortium.<br />
<strong>BG</strong> <strong>Group</strong> and <strong>CNOOC</strong> intend to complete negotiations and execute fully-termed transaction<br />
documents prior to <strong>BG</strong> <strong>Group</strong>’s final investment decision, expected in 2010, to sanction the<br />
QC<strong>LNG</strong> Project.<br />
The <strong>agreement</strong> was signed in Beijing on Tuesday, 12 May 2009, by the <strong>CNOOC</strong> President<br />
Fu Chengyu and the <strong>BG</strong> <strong>Group</strong> Chief Executive Frank Chapman. The significant transactions<br />
contemplated by the <strong>agreement</strong> will be conditional on applicable government and regulatory<br />
approvals.<br />
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<strong>BG</strong> <strong>Group</strong> and <strong>CNOOC</strong> have been in partnership in offshore exploration in China since 2006.<br />
In 2008, <strong>BG</strong> <strong>Group</strong> and <strong>CNOOC</strong> signed a Memorandum of Understanding under which the<br />
two companies agreed to explore opportunities for strategic cooperation.<br />
QC<strong>LNG</strong> firmly underpinned by <strong>BG</strong> <strong>Group</strong> global <strong>LNG</strong> supply <strong>agreement</strong>s<br />
In June 2007, <strong>BG</strong> <strong>Group</strong> signed a 25-year <strong>agreement</strong> to supply Chile's first <strong>LNG</strong> import<br />
terminal, and in April 2008 <strong>BG</strong> <strong>Group</strong> was selected as the <strong>LNG</strong> aggregator for Singapore for<br />
a period of up to 20 years. Upon execution of the fully-termed transaction documents <strong>with</strong><br />
<strong>CNOOC</strong>, <strong>BG</strong> <strong>Group</strong>’s <strong>LNG</strong> supply commitments <strong>with</strong> partners and customers in Chile,<br />
Singapore and China will account for up to 8.3 mtpa, firmly underpinning development of the<br />
two-train first phase of the QC<strong>LNG</strong> Project.<br />
<strong>BG</strong> <strong>Group</strong> Chief Executive Frank Chapman said: “This <strong>agreement</strong> is another important<br />
milestone in the development of the Queensland Curtis <strong>LNG</strong> Project. It builds on an already<br />
strong and productive relationship established <strong>with</strong> <strong>CNOOC</strong>. We look forward to working <strong>with</strong><br />
our <strong>CNOOC</strong> partners as we drive forward our plans to establish QC<strong>LNG</strong> in the vanguard of a<br />
new world-class <strong>LNG</strong> industry in Eastern Australia.”<br />
<strong>BG</strong> <strong>Group</strong>’s wholly-owned business, <strong>QGC</strong>, continues to make good progress <strong>with</strong> QC<strong>LNG</strong>.<br />
Upstream exploration, appraisal and development activities are advancing and Front End<br />
Engineering and Design work is underway. In February 2009, <strong>BG</strong> <strong>Group</strong> entered into an<br />
<strong>agreement</strong> <strong>with</strong> the Queensland Government to acquire a 270 hectare site at North China<br />
Bay on Curtis Island near Gladstone. The first phase of the QC<strong>LNG</strong> project will manufacture<br />
around 7.4 million tonnes per annum of <strong>LNG</strong> from two trains, beginning in 2014.<br />
Notes to Editors:<br />
-ends-<br />
<strong>BG</strong> <strong>Group</strong><br />
<strong>BG</strong> <strong>Group</strong> plc (LSE: <strong>BG</strong>.L) is a world leader in natural gas, <strong>with</strong> a strategy focused on<br />
connecting competitively-priced resources to specific, high-value markets. Active in 27<br />
countries on five continents, <strong>BG</strong> <strong>Group</strong> has a broad portfolio of exploration and production,<br />
Liquefied Natural Gas (<strong>LNG</strong>), transmission and distribution and power generation business<br />
interests. It combines a deep understanding of gas markets <strong>with</strong> a proven track record in<br />
finding and commercialising reserves. For further information visit: www.bg-group.com<br />
<strong>CNOOC</strong><br />
The China National Offshore Oil Corporation (<strong>CNOOC</strong>), founded in 1982, is one of the<br />
largest state-owned oil giants in China, as well as the largest offshore oil and gas producer. It<br />
is authorized to cooperate <strong>with</strong> foreign partners for oil and gas exploitation in China's<br />
offshore areas. Headquartered in Beijing, it has a total staff of 51,000 <strong>with</strong> a registered<br />
capital of RMB 94.9 billion.<br />
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<strong>QGC</strong><br />
<strong>QGC</strong> is a leading and award-winning Australian integrated energy business <strong>with</strong> a strategy<br />
focused on developing its world-class coal seam gas reserves in the Surat Basin and the<br />
Bowen Basin for domestic supply, power generation and export as <strong>LNG</strong>. Founded in 2000 as<br />
an explorer, <strong>QGC</strong> is a <strong>BG</strong> <strong>Group</strong> business <strong>with</strong> more than 300 employees in Queensland.<br />
<strong>QGC</strong>, already a supplier of natural gas to the Australian domestic market, is developing<br />
further domestic supply in addition to the Queensland Curtis <strong>LNG</strong> Project.<br />
QC<strong>LNG</strong><br />
Queensland Curtis <strong>LNG</strong> (QC<strong>LNG</strong>) is one of Australia’s largest capital infrastructure projects,<br />
spanning 400 kilometres from the gas fields of the Surat Basin west of Brisbane to Gladstone<br />
and nearby Curtis Island. The project is being developed by <strong>QGC</strong>, a <strong>BG</strong> <strong>Group</strong> business, to<br />
produce coal seam gas for transportation by pipeline to Gladstone. The gas will be chilled in<br />
a liquefaction plant on Curtis Island to form <strong>LNG</strong>. The project will employ more than 3 000<br />
people during its construction. The final investment decision is expected in 2010, <strong>with</strong> first<br />
shipments of <strong>LNG</strong> scheduled for 2014.<br />
Picture Desks:<br />
For visual images of <strong>BG</strong> <strong>Group</strong> visit: www.vismedia.co.uk (requires additional registration)<br />
UK contacts:<br />
Edel McCaffrey: +44 (0) 118 929 3508 edel.mccaffrey@bg-group.com<br />
Jo Thethi: +44 (0) 118 929 3110 jo.thethi@bg-group.com<br />
Out of Hours Media Mobile: +44 (0) 7917 185 707<br />
Investor Relations: +44 (0) 118 929 3025 invrel@bg-group.com<br />
Australia contacts:<br />
Hedley Thomas +61 (0) 417 797 419 hedley.thomas@bg-group.com<br />
Rob Millhouse +61 (0) 419 588 166 rob.millhouse@bg-group.com<br />
There are matters discussed in this media information that are forward looking statements. Such statements are only predictions<br />
and actual events or results may differ materially. For a discussion of important factors which could cause actual results to differ<br />
from the forward looking statements, refer to <strong>BG</strong> <strong>Group</strong>’s annual report and accounts for the year ended 31 December 2008.<br />
<strong>BG</strong> <strong>Group</strong> does not undertake any obligation to update publicly, or revise, forward looking statements, whether as a result of<br />
new information, future events or otherwise, except to the extent legally required.<br />
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