Shares in Australia's Liquefied Natural Gas Ltd (LNG) are up over 10 percent as the company confirmed it has agreed to sell a 20-percent stake to Chinese state-owned oil and gas giant CNPC for around A$25.6 million (US$25.35 million).
LNG says CNPC subsidiary, China Huanqiu Contracting & Engineering Corp. (HQCEC), would become LNG's largest shareholder after the purchase of the 19.9-percent stake.
Under the deal, which is subject to regulatory approvals, HQCEC would purchase 53.25 million shares in LNG for the lesser of 48 cents per share or 80 percent of the volume weighted average market price over the five days before the shares are issued.
LNG says it would apply the proceeds to development of the company's three million tonne per annum LNG project at Fisherman's Landing, near Gladstone in Central Queensland.
Shares in LNG had jumped 10.92 percent by 1035 AEDT, to 65.5 cents, after coming out of a trading halt that had been in place since Thursday morning.
A HQCEC nominee would be appointed as an executive director of the company and co-chief executive officer with LNG chief executive Maurice Brand.
Mr Brand said the two companies would work together to deliver Gladstone LNG.
"The appointment of a HQCEC nominated executive director and co-CEO will allow the company to liaise with and access the significant global resources of HQCEC and the CNPC group which will materially assist LNG Ltd to progress its current project portfolio and target a number of new LNG project opportunities," Mr Brand said in a statement.
CNPC said in a statement, released in China overnight, that the agreement would give HQCEC preferential rights to use the Australian firm's liquefied natural gas technology, which would help it become more competitive in the international LNG market.
It would also help CNPC develop its position in the Australian natural gas market, it said.
LNG chairman Richard Beresford said the investment by HQCEC was a "vote of confidence" in the company's OSMR process technology.
Chinese firms have made a series of bids for Australian resources, including Yanzhou Coal's $A3.5 billion takeover of miner Felix in 2009, the biggest for an Australian company by a Chinese firm.
The deal is dependent on HQCEC obtaining relevant approvals from Australia's Foreign Investment Review Board, China's Ministry of Commerce and National Economic Reform Commission and CNPC.
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