BG Group PLC (BG.LN) said Friday that it will expand the planned capacity at its Curtis liquefied natural gas project in Queensland, Australia, to 8.5 million metric tons a year, from 7.4 million tons a year previously.

The company said it has already signed supply contracts for 8.3 million tons a year of that capacity and will make a final investment decision on the project in the middle of this year. The reserves of coal seam gas that will supply the plant now stand at 17.3 trillion cubic feet, it said.

BG Group Chief Executive Frank Chapman said the Queensland LNG project will become, "the jewel in the crown of our LNG portfolio...on the doorstep of the world's largest LNG markets."

Chapman said BG has the capital, the expertise and the gas resources to complete the project without needing another partner, although he would consider joining forces with other companies on infrastructure that could be shared, such as a pipeline from the gas-producing region Gladstone on Queensland's coast.

The plant is scheduled to commence production in 2014.

Another major LNG project in which BG has a stake, Nigeria's OKLNG, is currently on the backburner and is unlikely to start up until the second half of this decade, said BG's Chief Financial Officer Ashley Almanza.

BG said its output growth in 2010 will be modest, but will accelerate beyond 2011 close to the top end of the 6% to 8% per annum range. By 2020 the company will be producing around 1.6 million barrels equivalent of oil and gas a day, said Chapman.

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