LNG, OBL deal to develop Canning Basin

Liquefied Natural Gas has entered into a strategic alliance agreement with Oil Basins to develop an LNG project in the Kimberley.

"The Kimberley LNG Project is based on utilising the potential large resources of conventional and unconventional gas contained within the Canning Basin, including gas contained within OBL's acreage and that of its joint venture partners," LNG said in a statement.

LNG said the Kimberley project will benefit from the advanced development work undertaken by the company for its Gladstone LNG Project in Queensland.

LNG holds a 4.9 per cent stake in Oil Basins after taking part in the company's recent share placement offer.

"The investment in OBL and Strategic Alliance Agreement, are consistent with the Company's integrated LNG project strategy and we look forward to working with the OBL Directors to progress work on OBL's potential gas resources and the Kimberley LNG Project," said LNG managing director Maurice Brand.

See full company statement below:

The Board of Liquefied Natural Gas Limited (ASX: LNG, Company) is pleased to advise that the Company has entered into a Strategic Alliance Agreement with Oil Basins Limited (ASX: OBL, OBL) to jointly investigate the development of an LNG project in North Western Australia (Kimberley LNG Project). The Kimberley LNG Project is based on utilising the potential large resources of conventional and unconventional gas contained within the Canning Basin, including gas contained within OBL's acreage and that of its joint venture partners.
In addition, the Company participated in the recent OBL share placement and holds a 4.9% shareholding in the company.
The proposed Kimberley LNG Project will benefit from the advanced development work undertaken by the Company for its Gladstone LNG Project, at Fisherman's Landing, Port of Gladstone, Queensland. Such development work includes completion of front end engineering and design and provision of a fixed price EPC proposal for the first 1.5 million tonne per annum LNG train.
OBL is involved in the exploration for oil and gas in the offshore Gippsland Basin of south-eastern Australia, the onshore Canning Basin of Western Australia and more recently the offshore waters of the Carnarvon Basin. All areas of interest are situated in proven hydrocarbon regions of Australia and nearby to established infrastructure hubs. OBL's key assets comprise:
- 12.5% Rights to Vic/P41 situated in the offshore Gippsland Basin,

- 17% Vic/P66 situated in the offshore Gippsland Basin,

- 90% Beneficial Rights to Backreef Area, in the onshore Canning Basin,

- 50% interest in 5/07-8 EP situated in the onshore Canning Basin, and

- 25% Retention Lease R3 situated in the offshore Carnarvon Basin.

Refer to the attached illustrations which identify OBL's areas of interest and, in particular, the location of OBL's onshore Canning Basin holdings.
Mr Brand, the Company's Managing Director, said that "following a strategy review by the Directors it has been determined, to assist influence or control project development (and thus mitigate development risks), the Company needs to be fully integrated with the gas resource for its proposed LNG projects. The Company continues to research three locations around Australia where the potential exists for LNG projects, utilising conventional and/or unconventional gas supply. The Kimberley region is one such location that could benefit from the Company's business model and OSMR® liquefaction technology."

"The investment in OBL and Strategic Alliance Agreement, are consistent with the Company's integrated LNG project strategy and we look forward to working with the OBL Directors to progress work on OBL's potential gas resources and the Kimberley LNG Project." Mr Brand stated.