Sinopec boosts Queensland LNG stake in Australia

Australia Pacific LNG and Sinopec amended their existing LNG sales agreement for the supply of an additional 3.3 million tpy of LNG through to 2035 from Australia Pacific LNG’s coal seam gas resources and LNG facility on Curtis Island, Gladstone in Queensland.

The signing of this agreement finalizes the marketing of the second train, the companies said.

This agreement increases Sinopec’s existing purchase commitment from Australia Pacific LNG from 4.3 million tpy to 7.6 million tpy of LNG, representing the largest LNG supply agreement in Australian history.

The parties have also agreed for Sinopec to subscribe for additional shares in Australia Pacific LNG, which on completion will raise Sinopec’s ownership interest to 25% from 15%.

As a result, ConocoPhillips’ and Origin Energy’s respective ownership interests will be reduced to 37.5% each, the companies said.

The key commercial terms of the binding agreements are consistent with the terms of existing LNG sales from the project and the deal signed with Sinopec in April 2011, officials said.

“The sale and purchase agreement with Australia Pacific LNG is an important part of Sinopec’s energy portfolio, and will help us to ensure long term gas supply for the growing demand in the Chinese market,” said Sinopec chairman Mr. Fu Chengyu.

“Today is another important milestone for the Australia Pacific LNG project” added ConocoPhillips CEO Jim Mulva. “Reinforcing the strong group of companies overseeing the Australia Pacific LNG project, we are pleased that Sinopec will have an increased shareholding of 25%.”

These agreements will build on Australia Pacific LNG’s existing domestic business, which currently provides more than 40% of Queensland’s existing natural gas requirements, the company said.

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