BG completes sale of QCLNG pipeline

UK-listed energy firm BG has completed the sale to Australian pipeline operator APA of the main pipeline connecting the 8.5mn t/yr Queensland Curtis LNG (QCLNG) project at Gladstone to onshore coal-bed methane fields in the Surat and Bowen basins at a final price of $4.6bn. APA has renamed it the Wallumbilla-Gladstone pipeline.

When BG first announced the sale of the 540km pipeline on 10 December last year, it said the sale price would be $5bn. The final acquisition price and tariffs were determined upon finalising the US producer price index and industrial commodity values.

BG had received consent for the sale from China's state-controlled energy firm CNOOC, which owns 50pc of the first QCLNG train that started production in December. The project's second train is being built and is expected to start operations in the third quarter.

The pipeline sale deal includes 20-year contracts to supply pipeline capacity to QCLNG, with options to extend the contracts by up to another 20 years. The QCLNG pipeline has excess capacity, which APA plans to use either to deliver additional gas or as storage to boost flexibility on its existing gas pipeline network on Australia's east coast. It will also consider expanding the pipeline if necessary.

km/rjd

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