King & Wood Mallesons has acted for BG Group on its binding agreements with China National Offshore Oil Corporation (CNOOC) for the sale of certain additional interests in the Queensland Curtis LNG (QCLNG) project in Australia for $1.93 billion and for the supply of an additional 5 million tonnes per annum of liquefied natural gas (LNG).
Additionally, CNOOC will reimburse BG Group for its share of QCLNG project expenditure incurred from 1 January 2012.
Under the terms of the agreements:
- BG Group will sell certain interests in upstream coal seam gas tenements in Australia and a further equity stake in the QCLNG project Train 1 liquefaction facility for $1.93 billion;
- BG Group will supply CNOOC with a further 5 mtpa of LNG for 20 years beginning in 2015, sourced from the Group’s global portfolio;
- CNOOC will acquire a 40% equity interest in QCLNG Train 1, increasing its equity ownership from 10% to 50%;
- CNOOC will acquire a 20% interest in the reserves and resources of certain BG Group tenements in the Walloons Fairway region of the Surat Basin, Queensland, increasing its ownership from 5% to 25%;
- CNOOC will acquire a 25% equity interest in certain other upstream tenements held by BG Group in the Surat and Bowen Basins, Queensland;
- BG Group and CNOOC will jointly invest in the construction of two LNG ships in China, adding to the two ships already committed under the LNG agreements signed in March 2010; and
- CNOOC will have the option to participate up to 25% in one of the potential expansion trains at QCLNG.
Completion of the transaction is expected by the end of the year, subject to government, regulatory and other relevant approvals and to the finalising and execution of certain other related documentation.
The King & Wood Mallesons team was led by Brisbane based energy & resources partner Craig Rogers, and also included partners Joshua Cole and Louis Chiam, senior associate Michael Lawson, and lawyers Danny Li, Theadora Tsangari and Carolyn Wong.
Craig Rogers said “We are delighted to have worked on a deal that represents yet another significant milestone for BG Group’s QCLNG project, and one which makes BG the largest supplier of LNG to the world’s fastest growing energy market.”
