Tokyo Gas Co Ltd says it has agreed with BG Group to buy liquefied natural gas (LNG) from the company's Queensland Curtis project. Under the agreement, Tokyo Gas, Japan's top gas distributor, will buy 1.2 million tonnes of LNG per year for 20 years from 2015. The Japanese group will also purchase a 1.25 per cent stake in some reserves and tenements held by BG's wholly-owned Australian subsidiary, QGC Pty Ltd, as well as a 2.5 per cent equity stake in QCLNG Train 2.
BG Group and Tokyo Gas intend to complete negotiations and execute fully termed agreements by the end of 2010. Under the plan, the gas would be supplied from the QCLNG and from BG Group's global LNG portfolio. The terms include the acquisition by Tokyo Gas of a 1.25 per cent interest in the reserves and resources of certain QGC tenements in the Walloons Fairway of the Surat Basin in Queensland. They also include the purchase by Tokyo Gas of a 2.5 per cent equity interest in QCLNG Train 2, the second of two liquefaction trains which will form the first phase of the QGC-operated QCLNG development.
The deal will depend on BG Group making a final investment decision on its Queensland Curtis project, which is expected to produce first gas by 2014. "The agreements extend further our long and fruitful relationship with Tokyo Gas, bringing a new source of natural gas to Japan – the world’s largest LNG market," BG Group chief executive Frank Chapman said in a statement. "Tokyo Gas will become one of our important foundation customers for Queensland Curtis LNG, as we progress rapidly towards project sanction later this year.”
Earlier this month, BG Group signed a 20-year sales agreement, worth about $60 billion, with China National Offshore Oil Corporation (CNOOC), representing Australia's largest ever trade deal.
