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BG Said to Seek Investors for Australian Natural Gas Project

BG Said to Seek Investors for Australian Natural Gas
BG shares slipped 2.9 percent to 1472 pence ($23.25) in afternoon trading in London on Tuesday. Source: VisMedia via Bloomberg

BG Group Plc, the U.K.’s third-largest oil and natural gas producer, is seeking investors for its Australian gas project, said three people with knowledge of the matter.

The company’s options include selling a stake of about 20 percent in Australian unit QGC Pty Ltd. or accepting an investment in its liquefied natural gas plant in the country, said the people, declining to be identified as the process is private. A deal may be valued at $1.5 billion to $2 billion, one of the people said. BG’s advisers have approached potential buyers in China and Japan, the person said.

BG said Feb. 9 it will sell $5 billion of assets in the next two years to maintain investment and production growth at projects in Brazil, the North Sea and Australia. The Reading, U.K.-based company plans to invest $22 billion in projects this year and next.

“We keep all assets in our global portfolio under review and all options are open,” said Neil Burrows, a spokesman for BG, in an interview. He declined to comment on the plan to seek investors for BG’s Australian assets.

BG plans to build two processing units at its plant near Curtis Island in Queensland state, with a combined capacity of 8.5 million metric tons of LNG a year.

The company said in November it will proceed with the $15 billion LNG venture, which is being built by its Australian unit and will convert coal-seam gas to LNG for shipment to overseas markets. China National Offshore Oil Corp. will have a 10 percent stake in the first LNG processing unit, while Tokyo Gas Co. will have a 2.5 percent interest in the second one, BG said in November.

LNG Competition

BG, Chevron Corp., Royal Dutch Shell Plc and ConocoPhillips are among energy companies investing about A$200 billion ($214 billion) in LNG projects in Australia to tap Asian demand for cleaner-burning fuel, according to data from the Australian Petroleum Production & Exploration Association.

Australian gas producer Santos Ltd. plans to produce 7.2 million tons of LNG a year from two units at its venture in Gladstone, a coastal town more than 300 kilometers north of Brisbane.

BG’s Curtis Island plant will be built over the next four years and is due to start fuel shipments in 2014, the company said Nov. 1. It has reached agreements to sell LNG to customers in China, Japan, Singapore and Chile and will also provide gas to markets in eastern Australia.

Last month, BG raised its gas resource estimate in Australia to 25 trillion cubic feet, from an earlier forecast of 21 trillion.

BG shares slipped 2.9 percent to 1472 pence ($23.25) in afternoon trading in London on Tuesday.

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