Australia-Pacific LNG signs deal with Sinopec
Australia-Pacific LNG (APLNG) has signed a binding agreement with the Sinopec Group of China that will see Sinopec take a total of 7.6 million tonnes of liquefied natural gas (LNG) per annum from the APLNG Project in Gladstone in Queensland. It is the largest LNG supply agreement in Australian history.
Sinopec will also increase its equity stake in the project to 25 per cent with the Australian company Origin Energy and the US energy company ConocoPhillips each having a 37.5 per cent interest. 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 Australia Pacific LNG reaching a final investment decision on the second train.
The deal builds on what was Australia’s largest fully-termed sales and purchase agreement for the supply of 4.3 million tonnes of LNG per annum from the APLNG Project (announced in April 2011) and brings a final investment decision on a second train for the Project within reach.
The key commercial terms of the binding agreements are consistent with the terms of existing LNG sales from the project and the Subscription Agreement signed with Sinopec in April 2011.
Chairman of Sinopec, Mr Fu Chengyu, said, “The Sale and Purchase Agreement with Australia Pacific LNG is an important part of Sinopec’s energy portfolio, and will help us to ensure long term gas supply for the growing demand in the Chinese market.”
Australia Pacific LNG’s existing domestic business currently provides more than 40 per cent of Queensland’s existing natural gas requirements.