CNOOC Signs LNG Agreement with BG Group     

China National Offshore Oil Corporation (CNOOC) signed a liquefied natural gas (LNG) project development agreement with UK's BG Group in Beijing on May 13th.
   Under the agreement, CNOOC will purchase 3.6 million tons per annum of LNG for a period of 20 years from the start-up of BG Group's Queensland Curtis LNG (QCLNG) Project in Australia, which is being developed by QGC - a BG Group business; CNOOC will purchase 5% of BG Group's interest in the reserves and resources of certain tenements (coalbed gas) in the Walloons Fairway of the Surat Basin in Queensland; CNOOC will become a 10% equity investor in one of the two liquefaction trains which will form the first phase of the QCLNG development at Gladstone in Queensland; and BG Group and CNOOC will jointly participate in a consortium formed to construct two LNG ships in China that would be owned by the consortium.
   CNOOC and BG Group intend to complete negotiations and execute fully-termed transaction documents prior to BG Group's final investment decision, expected in 2010, to sanction the QCLNG Project.
   The significant transactions contemplated by the agreement will be conditional on applicable government and regulatory approvals.