Sinopec boosts stake in APLNG project

MELBOURNE: China Petrochemical Corp (Sinopec) has paid around an estimated US$1 billion to increase its stake in the Australia Pacific liquefied natural gas (LNG) project
It has also agreed to buy another 3.3 million tonnes a year from the Queensland coal seam gas-derived project.
Sinopec had signed agreements with JV partners Origin Energy and US giant ConocoPhillips that will see its stake in the A$20 billion project rise from 15% to 25%.
Origin’s and ConocoPhillips’ ownership interests will reduce to 37.5% each.
The price of the stake or the LNG sales agreement announced yesterday was not revealed as the deal was not finalised but was consistent with the earlier Sinopec equity and sales agreements, APLNG chairman and Origin chief executive Grant King said.
Sinopec paid US$1.5 billion for its initial 15% stake, meaning it probably paid about US$1 billion for the increased stake.
Origin shares shot up by 43%, or 3.01%, to close at A$14.72 on Monday.
The parties have also agreed to increase the sale and purchase of coal seam gas-derived LNG to Sinopec by 3.3 million tonnes per annum through to 2035.
Last month, Origin and ConocoPhillips inked a 20-year sales deal with Japan’s Kansai Electric to supply it with about one million tonnes of LNG per year for two decades.
The sale agreement announced yesterday completes the marketing for the second processing train of the APLNG project on Curtis Island near Gladstone in central coastal Queensland. – AAP

It means 4.3 million of the 8.6 million annual tonnes in sales – the largest yet Australian LNG sales agreement – is dependent on booming gas demand from China and its desire to move away from coal to produce energy.
The increased Chinese investment also raised the prospect of more financing from Chinese banks.
There had been speculation a third train was being considered for the project, but King said that would not be marketed until at least 2013, or operational before 2017. – AAP