China Petrochemical Corp (Sinopec) has paid about $1 billion to increase its stake in the Australia Pacific liquefied natural gas (LNG) project.
It has also agreed to buy another 3.3 million tonnes a year from the Queensland coal seam gas-derived project.
Sinopec has signed agreements with JV partners Origin Energy and US giant ConocoPhillips that will see its stake in the $20 billion project rise from 15 per cent to 25 per cent.
Origin’s and ConocoPhillips’ ownership interests will reduce to 37.5 per cent each.
The price of the stake or the LNG sales agreement announced Monday was not revealed as the deal is not finalised but was consistent with the earlier Sinopec equity and sales agreements, APLNG chairman and Origin chief executive Grant King said.
Sinopec paid $US1.5 billion ($A1.47 billion) for its initial 15 per cent stake, meaning it probably paid about $US1 billion ($A982.95 million) for the increased stake.
Origin shares shot up by 43 cents, or 3.01 per cent, to close at $14.72 on Monday.
The parties have also agreed to increase the sale and purchase of coal seam gas-derived LNG to Sinopec by 3.3 million tonnes per annum through to 2035.
That follows an earlier agreement for the sale of 4.3 million tonnes per annum for 20 years from 2015.
Last month Origin and ConocoPhillips inked a 20-year sales deal with Japan’s Kansai Electric to supply it with about one million tonnes of LNG per year for two decades.
The sale agreement announced on Monday completes the marketing for the second processing train of the APLNG project on Curtis Island near Gladstone in central coastal Queensland.
It means 4.3 million of the 8.6 million annual tonnes in sales – the largest yet Australian LNG sales agreement – is dependent on booming gas demand from China and its desire to move away from coal to produce energy.
The increased Chinese investment also raises the prospect of more financing from Chinese banks.
There has been speculation a third train is being considered for the project but Mr King said that would not be marketed until at least 2013, or operational before 2017.
“Our focus is on getting the first two (processing) trains into production and seeing how they perform,” he told reporters in a teleconference.
“In respect of any third train, that would very much depend on development of the resource.”
The deal for the first train was estimated by observers to be worth $90 billion and was considered the nation’s biggest single LNG sale.
The commencement of LNG production is due in 2015.
