Under the terms of the agreement, the two companies will co-operate in the exploration and development of onshore coal seam gas acreage as well as in the development of domestic market opportunities and a new liquefied natural gas (LNG) production and export facility on the Queensland coast.
BG Group will acquire a 20% interest in Queensland Gas Company’s (QGC) coal seam gas assets in the Surat Basin in India, south west Queensland and in certain other related QGC assets. The BG Group will also pick up 9.9% stake in QGC, for a total consideration of GBP299 million.
BG Group will hold a 70% interest in the LNG facility and will offtake 100% of its initial planned production. The agreement is conditional upon necessary governmental and regulatory approvals.
The agreement marks BG Group’s first investment in Australia. QGC and BG Group have also agreed to cooperate in the evaluation of further coal seam gas opportunities in India, where BG Group already has established upstream and downstream business interests.
Frank Chapman, BG Group CEO, said: Our focus is on connecting competitively-priced gas to high-value markets. This alliance with QGC will secure access to new and commercially-proven sources of gas, with significant reserves potential within reach of Australian and Asia Pacific markets. We look forward to working with QGC to create value for both parties.
