Monday, Mar 07, 2011
BG Group today signed a sales agreement with Tokyo Gas Co., Ltd. (“Tokyo Gas”), concluding negotiations announced in March 2010 for the supply of 1.2 million tonnes of Liquefied Natural Gas (LNG) a year for 20 years from 2015.
Under the agreement, Tokyo Gas will be supplied with LNG from the Queensland Curtis LNG (“QCLNG”) facility on Curtis Island, near Gladstone in Queensland, Australia, and from the Group’s global LNG portfolio.
The QCLNG facility is being developed by BG Group’s wholly owned Australian subsidiary, QGC Pty Limited (“QGC”), to liquefy and export coal seam gas from QGC’s extensive acreage in the Surat Basin. BG Group sanctioned QCLNG on 31 October 2010 and the plant is planned to come onstream by 2014.
The agreement is the first fully termed sales agreement for supply to Japan of LNG sourced from coal seam gas. Japan is the world’s largest importer of LNG.
The LNG sales agreement, along with related agreements referred to below, were signed today in Brisbane, Queensland, by Tokyo Gas President Tsuyoshi Okamoto; BG Group Executive Director, Executive Vice President and Managing Director, Americas and Global LNG, Martin Houston; and BG Group Executive Vice President and Managing Director, Australia, Catherine Tanna.
In addition to the LNG sale, under the terms of the related agreements executed today:
Tokyo Gas will acquire a 1.25% equity interest in the reserves and resources of certain BG Group tenements in the Walloons Fairway of the Surat Basin in Queensland. Tokyo Gas will reimburse BG Group for 1.25% of costs incurred in respect of the tenements; and
Tokyo Gas will become a 2.5% equity investor in QCLNG Train 2, the second of two liquefaction trains which will form the first phase of the QGC-operated QCLNG development. Tokyo Gas will reimburse BG Group for 2.5% of costs incurred in respect of Train 2.
BG Group Chief Executive Frank Chapman said: "Tokyo Gas is now an important foundation customer for our ground-breaking Queensland Curtis LNG Project. With these agreements we will bring a new source of natural gas to Japan – the largest LNG market – and advance the long and rewarding relationship between our companies."
QCLNG is underpinned by BG Group global LNG sales agreements for almost 10 million tonnes a year comprising: the agreement with Tokyo Gas announced today; a 20-year, 3.6 million tonnes a year agreement with the China National Offshore Oil Corporation; a 21-year, 1.7 million tonnes a year agreement to GNL Chile; and a 20-year agreement to supply up to 3 million tonnes a year to customers in Singapore.
Source: BG Group