BG, CNOOC sign 20-year LNG deal

State-owned China National Offshore Oil Corp (CNOOC) signed a binding agreement with BG Group to buy gas from an Australia project, the Australian government said yesterday.

Under the sales and purchase agreement, which cements a preliminary deal inked last year, CNOOC will buy 3.6 million tonnes of liquefied natural gas (LNG) per year for 20 years from BG's Queensland Curtis LNG plant in Australia, the Minister of Resources and Energy Martin Ferguson said in a statement.

"This contract is an unprecedented vote of confidence in Queensland's new coal seam gas-based LNG industry," he said.

The Queensland Curtis project, to be built in the northeast state of Queensland, has a proposed production capacity of 8.5 million tonnes a year and is slated for a final approval in the middle of this year.

It is one of five LNG project slated for construction in Queensland. Other projects due for an approval this year include Gladstone LNG by Santos and Malaysia's Petronas , and Australia Pacific LNG by Origin Energy and ConocoPhillips.

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