The multi-billion-dollar Australia-Pacific liquefied natural gas (APLNG) expansion project is nearing a decision to proceed.
This follows China’s state-owned Sinopec signing up for more gas and a higher equity interest in the Queensland-based, Origin Energy and ConocoPhillips-led project and the completion of marketing for a second “train” or processing plant.
“With the marketing of the second train now complete, the joint venture is on track to make a final investment decision on the second train in early 2012,” Origin chairman Kevin McCann said in a statement.
Resources Minister Martin Ferguson said more than 18 million tonnes per annum (Mtpa) of LNG from Australian projects was now under contract to China.
“The $14 billion APLNG project is part of the $45 billion being invested in Gladstone and regional areas of central and southern Queensland by the LNG industry,” Mr Ferguson said in a statement on Monday.
“A second train at APLNG will add to this figure.”
The project will be fed with coal seam gas from fields in south central Queensland.
The joint venture brought Sinopec into the project, near Gladstone, in April last year with a 15 per cent equity stake.
On Saturday, Sinopec increased its stake to 25 per cent for $US1.1 billion ($A1.05 billion).
Sinopec also over the weekend inked a deal to buy another 3.3 Mtpa of LNG from the project through to 2035.
Sinopec has already agreed to buy up to 4.3 Mtpa from the project’s first processing train.
The amended agreement increases Sinopec’s purchase commitment to 7.6 Mtpa, making it the largest LNG supply deal in Australia.
However, the earlier version also held that status and was estimated by analysts to be worth $90 billion.
A positive decision to proceed with the first train was made in July last year and the second train is expected to be sanctioned early this year.
Sinopec chairman Fu Chengyu said the deal represented an important part of the company’s energy portfolio and would help ensure growing demand in the Chinese market would be met by a long-term gas supply.
Shares in Origin were one cent higher at $13.57 at 1536 AEST.