Sinopec signs binding agreement with Origin Energy, ConocoPhillips JV for 20-year LNG supply, 15% equity interest
China Petrochemical Corporation (Sinopec) has signed binding agreements for LNG supply from and a 15% equity interest in Australia Pacific LNG, a joint venture between Origin Energy and ConocoPhillips, on completion for a net consideration of US$1.5 billion.
The Sale and Purchase Agreement, worth an estimated A$90 billion (US$96.6 billion), is for the supply of 4.3 million tonnes per year of LNG for 20 years from Australia Pacific LNG’s world-class coal seam gas resources and proposed LNG facility on Curtis Island, Gladstone in Queensland.
The equity agreement reduces ConocoPhillips’ and Origin Energy’s ownership interest to 42.5% respectively.
These agreements reflect the commercial terms outlined in the Heads of Agreement signed between Australia Pacific LNG and Sinopec on 25 February 2011. The agreements are subject to approvals by the Chinese Government and in Australia, the Foreign Investment Review Board and are conditional on Australia Pacific LNG reaching a final investment decision.
This will help Sinopec diversify its natural gas supply and meet the rapidly increasing demand of customers in China. Sinopec continues looking for more cooperation opportunities in Australia.—Zhang Yaocang, Vice President of Sinopec Group and Vice Chairman of Sinopec Corporation
The Australia Pacific LNG project consists of:
The further development of Australia Pacific LNG’s gas fields in the Surat and Bowen basins in south western and central Queensland.
A gas pipeline from the gas fields to an LNG facility in Gladstone in Queensland.
An LNG facility on Curtis Island in Gladstone, the first two trains of which will have a processing capacity of up to 9 million tonnes per annum.
Australia Pacific LNG’s first cargo is expected to be exported in 2015.