PERTH (miningweekly.com) – The joint venture (JV) partners in the Australia Pacific liquefied natural gas (APLNG) project would rake in some $1.1-billion as China Petrochemical Corporation (Sinopec) upped its stake in the project.

ASX-listed Origin Energy and its JV partner ConocoPhillips on Monday made good on its December heads of agreement with Sinopec to sell a further 10% interest in the APLNG project, and to supply an additional 3.3-million tons a year of LNG through to 2035.

The three parties have now signed a binding agreement, which would increase Sinopec’s total shareholding in APLNG to 25%, while reducing Origin and ConocoPhillips' shareholding to 37.5% each.

The agreement also increased Sinopec’s existing purchase commitment from the APLNG project from 4.3-million tons a year to 7.6-million tons a year of LNG, representing the largest LNG supply agreement in Australian history.

Sinopec chairperson Fu Chengyu said in a statement that the sale and purchase agreement with the APLNG was an important part of the company’s energy portfolio, and would help Sinopec ensure long-term gas supply for the growing Chinese market.

The subscription agreement was subject to Chinese and Australian government approvals, as well as approval from the Foreign Investment Review Board. It was also conditional upon the APLNG JV partners reaching a final investment decision on the second train.

The first LNG train was sanctioned in July last year, followed by the signing of a heads of agreement with the Kansai Electric Power Company, in November, for the sale and purchase of around one-million tons a year of LNG, for a 20-year period starting in 2016.

The two-train project, which would have a nine-million-ton-a-year capacity, would be built at a capital cost of $20-billion.
 

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