Regional LNG: AP LNG, Sinopec in further LNG supply deal
Saturday, January 21 2012 - 02:44 AM WIB
Australia Pacific LNG Pty Ltd (AP LNG) and Chinese firm Sinopec have on Friday signed an amendment to their existing LNG sales agreement for the supply of an additional 3.3 million tonnes per annum (mtpa) of LNG through to 2035 from APLNG?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.
This agreement increases Sinopec?s existing purchase commitment from AP LNG from 4.3 mtpa to 7.6 mtpa of LNG, representing the largest LNG supply agreement in Australian history.
The parties have also signed a Subscription Agreement for Sinopec to subscribe for additional shares in AP LNG, which on completion will raise Sinopec?s ownership interest from 15 per cent to 25 per cent. As a result, ConocoPhillips? and Origin Energy?s respective ownership interests will be reduced to 37.5 per cent.
The key commercial terms of the binding agreements announced today are consistent with the terms of existing LNG sales from the project and the Subscription Agreement signed with Sinopec in April 2011.
In April 2011, AP LNG and Sinopec signed a sales agreement for 4.3 mtpa of LNG for 20 years from mid-2015 and a Subscription Agreement in which Sinopec subscribed for a 15 per cent equity interest in AP LNG. The first train of the project was sanctioned in July 2011, followed by the signing of a binding Heads of Agreement with The Kansai Electric Power Company (Kansai Electric) in November 2011 for the sale and purchase of approximately 1 mtpa of LNG for 20 years from 2016.
The Subscription Agreement is subject to approvals by the Chinese Government and in Australia, the Foreign Investment Review Board and, along with the amendment to the sales agreement, is conditional on AP LNG reaching a final investment decision on the second train.
The AP LNG project includes the development of its substantial coal seam gas resources in the Surat and Bowen Basins, a 530 km transmission pipeline, and a multi-train LNG facility on Curtis Island, near Gladstone. The AP LNG project was sanctioned in July 2011 for an initial LNG production train and infrastructure to support a second train.
Editing by David Mustakim