Energy and Natural Resources Finance for Queensland Curtis LNG Project in Australia

abarrelfullabarrelfull wrote on 05 Oct 2011 14:07
Tags: australia bg-group jbic lng tokyo-gas

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The Japan Bank for International Cooperation (JBIC; President & CEO: Hiroshi Watanabe) signed on September 14, 2011, a loan agreement totaling up to 175 million US dollars with Tokyo Gas Co., Ltd. (Tokyo Gas). The loan is cofinanced with private financial institutions.

This loan will finance a coal-bed methane (CBM) based liquefied natural gas (LNG) project undertaken by Tokyo Gas jointly with QGC Pty Limited (QGC), an Australian corporation affiliated with BG Group Plc (BG Group), a company incorporated in the United Kingdom, and China National Offshore Oil Corporation (CNOOC), a company incorporated in the People’s Republic of China. In this project, 8.5 million tons of LNG will be produced annually on Curtis Island off the coast of Gladstone, Queensland, from the CBM gas field in the Surat basin of the same state. The proceeds of the loan will be used by Tokyo Gas to acquire interest from BG Group, and develop CBM and produce LNG. This is the first loan provided by JBIC for the CMB-LNG project.

Through participation in this project, Tokyo Gas has acquired a 1.25% upstream interest as well as a 2.5% interest in the second liquefaction train. In addition, Tokyo Gas has concluded a long-term sales and purchase agreement with BG Group to take an annual delivery of 1.2 million-ton LNG, which is equivalent to more than 10% of the company’s annual offtake volume, over two decades from 2015. This sales and purchase agreement sets forth that the LNG is to be supplied from multiple sources in BG Group’s LNG portfolio including this project, providing a stable and flexible supply of LNG to the company.

Australia occupies an extremely significant position in terms of supplying natural gas to Japan. CBM reserves stored in coal beds are believed to account for approximately 40% of the total proven natural gas reserves in Australia. In Queensland, where a large portion of the country’s CBM is located, a number of projects are ongoing, including this project, to liquefy CBM into LNG for export. By supporting the Japanese firm’s participation in the CBM-LNG project, JBIC’s loan will also help it accumulate know-how and experience of Japanese firms in CMB development.

JBIC will continue to contribute to Japan’s energy security by actively supporting the acquiring of interest in crude oil and natural gas by Japanese firms.

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