The deal builds upon April's agreement for APLNG, a joint venture between Origin Energy Ltd. and ConocoPhillips, to supply Sinopec with 4.3 million tons of liquefied natural gas a year for 20 years. It effectively gives Sinopec 25 percent control over the project.
While financial details of the agreement weren't disclosed, April's deal was worth an estimated $90 billion.
"The agreement with Sinopec represents another significant step for (the) Australia Pacific LNG project and is testament to the strength of the project," Origin Chairman Kevin McCann said in a statement.
In an effort to beef up domestic reserves and supply, Chinese energy companies have been targeting overseas oil and gas assets, with current bids totaling $16 billion.
"We are very pleased to extend our relationship with Australia Pacific LNG, and in doing so, will further assist China and Sinopec to meet its growing energy demands," said Sinopec Chairman Fu Chengyu.
In the first nine months of this year, China's apparent consumption of natural gas -- consisting of domestic output and imports, excluding imports -- reached 93.7 billion cubic meters, an increase of 20 percent from 2010, with domestic production increasing 7 percent, figures from China's National Development and Reform Commission indicate.
Just as China became a price setter on the iron ore market during the last three years, it could also become a future price setter for natural gas, Edward L. Morse, managing director of commodities research at Citigroup Global Markets Inc., told an energy conference at Baker Institute for Public Policy in Houston earlier this month.
"By the end of the decade, China will pass Japan as the biggest LNG importer," he said.
Baker Institute researchers Kenneth B. Medlock and Peter Hartley, in a study about China's role in global LNG markets, forecast China to account for 24 percent of all global LNG imports by 2040.
"The natural gas sector is strategically important for the nation's state-owned oil companies ... the LNG market is going to (be) a fierce battleground for them in the near future, given the escalating demand for cleaner fuel," Zhou Xiujie, an energy analyst at China Investment Consulting told China Daily newspaper.
In a 2008 agreement with Qatar, the world's top LNG exporter, China will receive 3 million tons of LNG annually for 25 years, the first shipment of which arrived last month.