BG Group has reached an agreement with Tokyo Gas for the supply of Liquefied Natural Gas (LNG) from the Queensland Curtis LNG ("QCLNG") facility to be developed by BG Group's wholly owned Australian subsidiary, QGC Pty Limited ("QGC").
The overall agreement sets out the basis upon which the parties will negotiate to conclude terms for:
- the purchase by Tokyo Gas of 1.2 million tonnes per annum (mtpa) of LNG for 20 years from 2015, to be supplied from the QCLNG facility and from BG Group's global LNG portfolio;
- the acquisition by Tokyo Gas of a 1.25% interest in the reserves and resources of certain QGC tenements in the Walloons Fairway of the Surat Basin in Queensland; and
- the purchase by Tokyo Gas of a 2.5% equity interest in QCLNG Train 2, the second of two liquefaction trains which will form the first phase of the QGC-operated QCLNG development.
BG Group and Tokyo Gas intend to complete negotiations and execute fully termed agreements by the end of 2010. The final agreements will be conditional on BG Group making a Final Investment Decision on QCLNG, expected later this year. QCLNG is expected to produce first LNG by 2014.
BG Group Chief Executive Frank Chapman said: "The agreements extend further our long and fruitful relationship with Tokyo Gas, bringing a new source of natural gas to Japan -- the world's largest LNG market. Tokyo Gas will become one of our important foundation customers for Queensland Curtis LNG, as we progress rapidly towards project sanction later this year."
The two-train QCLNG development on Curtis Island, near Gladstone, Queensland is firmly underpinned by BG Group LNG agreements to deliver cargoes from both QCLNG and from the Group's global LNG portfolio to customers across the Pacific Basin. Those agreements include:
- a 20-year 3.6 mtpa sales and purchase agreement with the China National Offshore Oil Corporation, ("CNOOC"), announced March 2010;
- a 21-year sales and purchase agreement to supply 1.7 mtpa to Quintero LNG in Chile, announced June 2007; and
- a 20-year agreement to supply up to 3 mtpa to customers in Singapore, announced April 2008.