Sinopec signs massive purchase agreement for Australian LNG

Australia Pacific LNG Pty Ltd and China Petroleum & Chemical Corp. (Sinopec) have signed a Sale and Purchase Agreement for the supply of 4.3 million tpa of LNG for 20 years from Australia Pacific LNG’s CBM resources and proposed LNG facility on Curtis Island, Queensland, that could be worth up to US$ 85 billion.

Australia Pacific LNG and Sinopec International Petroleum Exploration & Production Corporation (SIPC, a 100%-owned subsidiary by Sinopec Group) also signed US$ 1.5 billion Subscription Agreement, subscribing SIPC for a 15% interest in Australia Pacific LNG thereby reducing ConocoPhillips’ and Origin Energy’s ownership interest to 42.5% respectively.

These agreements reflect the commercial terms outlined in the Heads of Agreement signed between Australia Pacific LNG and Sinopec in February of this year. The agreements are subject to approval by the Chinese Government and in Australia, the Foreign Investment Review Board and are conditional on Australia Pacific LNG reaching a final investment decision.

Origin Energy managing director, Grant King said, “Today marks an important milestone in the development of the Australia Pacific LNG project and represents the largest LNG supply agreement in Australian history by annual volume.

ConocoPhillips’ senior vice president exploration and production, Ryan Lance added, “Australia Pacific LNG continues to be in discussions with other customers that have the potential to secure off-take agreements.”

The LNG volumes from Australia Pacific LNG will underpin Sinopec’s yet to be constructed Guangxi Receiving Terminal and could also be directed to other LNG import and gasification terminals within China. “The LNG export agreement builds on Australia Pacific LNG’s existing domestic business, which currently provides 40% of Queensland’s natural gas requirements. The project stands to create thousands of jobs in regional Queensland and deliver significant opportunities for many local communities in which we operate as well as broader economic benefits,” King said.

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