China National Offshore Oil Corp. (CNOOC) said on Wednesday it had signed an agreement with United Kingdom-based BG Group involving a liquefied natural gas (LNG) development project in Queensland, Australia.

Under the agreement, CNOOC would buy 3.6 million tonnes per annum (mtpa) of LNG for 20 years from the start-up of the Queensland Curtis LNG Project in Australia, which is being developed by the BG Group.

The project would come on line in 2014 with two liquefaction trains providing 7.4 mtpa capacity.

CNOOC would also take a 5-percent stake in the reserves and resources of some BG group holdings and a 10-percent share in the equity in one of the two liquefaction trains.

BG Group and CNOOC would jointly participate in a consortium formed to build two LNG tankers in China that would be owned by the consortium.

Fu Chengyu, president of CNOOC, said the agreement was a milestone in the strategic cooperation between CNOOC and the BG Group in natural gas.

CNOOC is the nation's largest offshore oil and gas producer. It has built four LNG receiving terminals in the coastal provinces of Guangdong, Fujian and Zhejiang provinces and in Shanghai.

(Xinhua News Agency May 13, 2009)