BRISBANE, Australia, Jan. 25 (UPI) -- Chinese oil giant Sinopec has finalized a $1.1 billion deal to increase supply and raise its equity in the Australia-Pacific LNG project in Queensland.
The binding agreement seals an agreement announced last month between APLNG and state-owned Sinopec for the $20 billion project, led by Houston company ConocoPhillips and Australia's Origin Energy and builds on an April 2011 agreement.
Under the deal announced Monday, Sinopec will increase its equity stake in the project from 10 percent to 25 percent, with Origin and ConocoPhillips now each having a 37.5 percent interest.
"The extension of the existing LNG sales agreement between Australia Pacific LNG and Sinopec represents the largest LNG supply agreement in Australian history and is testament to the scale and quality of the project," Origin Energy Chairman Kevin McCann said in a statement.
The agreement, Origin said, increases Sinopec's purchase commitment of LNG from APLNG to a total of 7.6 million tons a year, up from 4.3 million tons a year.
Australia's Minister for Resources and Energy Martin Ferguson said the deal further cements Australian position as a major supplier of energy to the Asia Pacific Region.
"Today's agreement with Sinopec will see Australia continue to be a pre-eminent supplier of safe, secure and low-emission energy to China with more than 18 million tons of LNG per annum now under contract to China from Australia," Ferguson said in a statement Monday.
APLNG is part of a total of $45 billion being invested by the LNG industry in Queensland, Ferguson said, playing a crucial role in insulating Australia from continuing global economic uncertainty as well as helping the region to recover from the economic effects of last year's cyclone and floods.
The minister said the project is expected to create thousands of jobs in regional Queensland and represents "billions of dollars in export income for the wider Australian economy."
"This deal further emphasizes Australia's link into the Asia Pacific Region and in particular with China," he said. "This relationship has continued to build since Australia first started to export LNG from the North West Shelf Venture Project to China in May 2006."
The first train of the APLNG project is planned to come on stream in 2015. The signing of agreement, Origin says, finalizes the marketing of the second train, expected to start production in 2016.
The agreement is subject to approvals by the Chinese government and Australia's Foreign Investment Review Board.