by Staff Writers
Sydney (AFP) Dec 12, 2011
China's Sinopec raised its stake in a major Australian-US liquefied natural gas (LNG) project and almost doubled its sales contract Monday as Beijing scrambles to secure energy supplies.
Australia Pacific LNG (APLNG), a Aus$35 billion (US$35.5 billion) joint venture between Australia's Origin Energy and US firm ConocoPhillips, said Sinopec had bumped up its share in the project from 15 to 25 percent.
It had also agreed to purchase an additional 3.3 million tonnes per annum (mtpa) of LNG over 20 years from 2015, taking its total commitment to 7.6 mtpa.
The Sinopec contract is among Australia's biggest-ever LNG deals and the Chinese company's chairman Fu Chengyu said its extension would "further assist China and Sinopec to meet its growing energy demands".
China's government and Australia's foreign investments watchdog will have to approve the new agreement before it is binding, and the project will also have to reach a final investment decision on the next stage of development.
Japan's Kansai Electric is the project's other major client and has agreed to take 1.0 mtpa for 20 years from 2016.
APLNG, in northern Queensland state, is the largest such project planned in Australia using pioneering coal seam technology to cool and liquefy underground gases that burn cleaner than coal and other fuels and are relatively easy to ship.
It is banking on increased demand for green energy, particularly from Asia, as the world moves to meet pollution reduction targets.
The venture said earlier this year that interest in LNG had also been boosted by the March earthquake and tsunami in Japan which sparked a nuclear crisis.
Chinese demand for gas is forecast to jump 5.9 percent every year until 2035, compared with OECD growth of 0.5 percent, taking the Asian giant's share of global gas consumption from 2.7 percent in 2008 to 8.7 percent by 2035.
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