CNOOC to become China's biggest owner of LNG assets in Australia

China National Offshore Oil Corp (CNOOC) has signed a deal to purchase a quarter stake in the Queensland Curtis LNG Project at Gladstone from BG Group (LSX:BG).

The Australian reports
that CNOOC and BG have signed a USD$1.93bn heads of agreement deal for the stake in onshore coal seam gas ground as well as a 40% stake in one of two LNG trains under construction.

CNOOC will also pay BG an additional USD$3bn to USD$4bn for the construction costs of the project.

Under the deal CNOOC, one of China's largest state-owned enterprises, will see its total stake in the project rise from 5% to 25%, making it the biggest Chinese owner of liquid natural gas in Australia.

The Gladstone project is scheduled to commence Australia's first coal seam gas exports in 2014, most of which will be headed for the PRC.

CNOOC has also entered an LNG supply deal with BG worth over USD$60bn, under which CNOOC will purchase 5 million tonnes of natural gas from BG over the next two decades. The deal is set to make the British natural gas giant the Middle Kingdom's biggest supplier of the fossil fuel.

CNOOC's purchase of the Gladstone stake remains contingent upon government and regulatory approvals.