Show Hide image

BG invests £9.3bn in first of its kind LNG project

Gas and oil firm to invest in the world's first project to liquify gas from coal deposits.

International gas and oil company BG Group will be investing £9.3bn - its largest ever investment - on the world's first project to liquify and ship gas produced from coal deposits, the company said in an announcement on Monday.

The British company's 20-year Queensland Curtis scheme - to be operational by 2014 - is the first in a series of "coal seam methane" projects in the region of eastern Australia and will be capable of an annual production rate of 8.5m tonnes of liquified natural gas (LNG).

BG will build a 540km underground pipeline in Queensland that will transport gas producing coal deposits to a terminal in Gladstone on the east coast. The terminal will in turn liquify the LNG.

The company will make available more details when it reports its third quarter results on Tuesday.

Among prospective buyers are China National Offshore Oil Corporation (CNOOC) which has entered into the biggest supply contract with BG for 3.6m tonnes of LNG annually for 20 years.

BG has also entered into supply agreements with Chile, Japan and Singapore.