The prospect of Australia's coal seam gas industry developing large-scale export projects has received a major boost with BG Group (formerly British Gas) agreeing to invest $664 million in Queensland Gas Company.
The prospect of Australia's coal seam gas industry developing large-scale export projects has received a major boost with BG Group (formerly British Gas) agreeing to invest $664 million in Queensland Gas Company.
A QGC statement is pasted below:
QGC AND BG GROUP COMPLETE LNG TRANSACTION
QGC RECEIVES $664 MILLION
Australia's leading coal seam gas producer, Queensland Gas Company (QGC), today completed the transaction
to form a world-scale LNG alliance with global energy company, BG Group.
The completion in Brisbane today resulted in QGC receiving $664 million from BG Group (formerly British Gas).
QGC Chairman Robert Bryan said he was delighted that the transaction was completed today, ahead of schedule and in recognition of the importance of a key component of the alliance with BG Group.
QGC and BG Group are working on a joint commitment for the annual export of 3-4 million tonnes of liquefied natural gas (LNG) from an LNG plant proposed to be built near Gladstone on the Central Queensland coast.
QGC will supply the LNG plant with 190 petajoules of coal seam gas a year from the company's tenements in the Surat Basin. The project is scheduled to export its first shipment of LNG in 2013.
"The transfer of the funds today from BG Group marks BG's first investment in Australia and reinforces the seriousness and credibility of the alliance with QGC,'' Mr Bryan said.
"This is a tremendous step forward for QGC because it provides us with the means to continue QGC's rapid growth.''
The transaction which gives rise to QGC's alliance with BG Group has received relevant approvals from the Foreign Investment Review Board (FIRB) and the Queensland Government.
QGC will receive a further $207 million from BG Group for the sale of a further 10 per cent of QGC's interests in the
Walloon coal seam gas acreage, upon the earlier of a positive Final Investment Decision (FID), or the certification of
7,000 petajoules of proved and probable (2P) reserves.
Independent certifiers Netherland Sewell & Associates have assessed that QGC currently has 1,317 petajoules of proved and probable (2P) reserves, and more than 7,255 petajoules in reserves and contingent resources.
As part of the understanding with BG Group, Mr Bryan welcomed Mr David Maxwell, BG Group's Managing Director Business Development, as an alternate director to the Board of QGC.
QGC Managing Director Richard Cottee, in India on a trade mission with Queensland Premier Anna Bligh and for
meetings with BG Group executives in Mumbai, said BG Group's initial investment is equivalent to more than 20 per
cent of QGC's market capitalisation. He said the transaction will transform QGC's focus.
"The fact we have been able to achieve this just nine weeks after we jointly announced our innovative alliance gives me great confidence in the end game,'' Mr Cottee said.
