BG Group to Supply Coal Seam Gas to China

BG Group will supply 3.6mtpa of liquefied natural gas (LNG) to China National Offshore Oil Corporation (CNOOC) under a new $40bn contract.

According to the 20-year contract, BG Group will supply China with LNG produced at the proposed Queensland Curtis LNG facility in Queensland, Australia.

The facility, which is expected to come onstream by 2014, will be supplied with coal seam gas from the firm’s acreage in the Surat Basin.

CNOOC will also acquire 5% of BG’s coal-seam gas interests in the Surat Basin and hold a 10% stake in an LNG processing unit as part of the agreement.

China’s consumption of natural gas in 2010 is expected to reach 110 billion cubic metres, up more than 37% from 80 billion cubic metres only two years ago.