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| Clermont Meridian Trading Reacts to Australia's Biggest Ever Gas Deal |
Chinese state-owned company, China National Offshore Oil Corp (CNOOC), has agreed to purchase around $60bn worth of liquified natural gas (LNG) from a Queensland project owned by BG Group of Great Britain. Financial experts from wealth management company Clermont Meridian Trading have reviewed the transaction.
The deal is Australia’s biggest ever gas deal and also the world’s first fully-termed sales contract for LNG sourced from Coal Seam Gas (CSG), according to a statement from Resources Minister Martin Ferguson, who witnessed the signing in Beijing today.
Australian Resources Minister Martin Ferguson, who witnessed the signing of the deal in Beijing, said. ‘‘This deal makes Australia the world leader in the coal seam gas-based LNG industry, and it brings us one important step closer to opening up a new LNG province on Australia’s east coast in Queensland.”
Mr Ferguson said. ‘‘It also further demonstrates Australia’s attractiveness as an internationally competitive and safe destination for global capital.’’
The deal follows a proposal first put forward in May 2008 and sees CNOOC purchase 3.6 million tonnes per annum (Mpta) of LNG over a 20 year period from BG Group’s Queensland Curtis CSG-LNG project based near Gladstone, and equates to approximately 50% of the expected output during the first phase of the project. Production will begin in 2014, and the cost of development is expected to exceed $10bn.
The Curtis deal involves CNOOV purchasing an interest in BG Group’s CSG resources in Surat Basin. When the deal is complete, subject to foreign investment and other regulatory approvals, CNOOC will become an equity partner in one of the two proposed LNG processing ‘train’ at the project in Gladstone.
According to Queensland Premier Anna Bligh, federal and state environmental approval is expected by the middle of 2010. In a statement, Ms Bligh said. ‘‘We (Queensland) are now a leading player in the global LNG market.” She went on to say the deal places Queensland at the centre of a growing industry.
The project will provide employment for 8500 people during its peak construction phase, with a further 1000 employees once operational. The initial phase will see two ‘trains’ produce an estimated 7.4 Mtpa of LNG.
Prior to the recently agreed deal, Australia’s largest single trade deal between two entities had been Chevron Corporation selling $90bn worth of LNG from its Wheatstone project in WA to the Japan-based Electric Power Company late last year. That deal is yet to be made binding.
The Wheatstone agreement is the larger of the two by volume with 82 million tonnes contracted to be produced over 20 years, while Clermont Meridian Trading analysts believe the BG Group deal will produce 2 million tonnes over the same period.
Gladstone looks set to benefit from other large LNG projects too. Royal Dutch Shell intends to fuel its Curtis Island processing facility via a proposed multi-billion-dollar joint takeover of Arrow Energy Ltd, which will make them joint owners with PetroChina.
BG Group’s plans for the Curtis LNG project were encouraged by the 2008 takeover of CSG firm Queensland Gas Company Ltd for a fee of $5bn.