BG, CNOOC sign $60 billion (Aus.) CSG-LNG contract

Rick Wilkinson
OGJ Correspondent

MELBOURNE, Mar. 25 -- BG Group signed a 20-year, $60 billion (Aus.) contract to supply China National Offshore Oil Corp. (CNOOC) with 3.6 million tonnes/year of LNG from coal seam gas.

The contract is being billed as the world’s first signed CSG-LNG deal.

BG acquired Brisbane-based Queensland Gas Co. in 2008 for $5 billion (Aus.), gaining vast CSG resources in the Surat and Bowen basins of southeast Queensland. It would supply LNG from its proposed plant near the Queensland central east coast port of Gladstone. The first two trains of the $10 billion (Aus.) development are expected to come on stream in 2014.

The deal includes CNOOC holding a 10% stake in the LNG plant. Some 8,500 people will be employed during the building phase and 1,000 employees will then run and maintain the plant.

A final investment decision on plant construction is expected this year.