Under the deal announced Wednesday, PetroChina would acquire an 8.33 percent interest in the East Browse Joint Venture and a 20 percent interest in the West Browse Joint Venture, equivalent to 1-10th of the overall Browse development.
Other partners in the Woodside Petroleum-led Browse project are BP, Japan Australia LNG -- a Japanese consortium that includes Mitsubishi and Mitsui -- and Shell.
"This is an excellent opportunity for both companies. PetroChina has acquired an interest in a world class gas resource and BHP Billiton has exited a non-strategic asset," BHP Billiton Chief Executive Petroleum J. Michael Yeager said in a release.
The deal is subject to regulatory approvals and the Browse partners have the right to match PetroChina's bid.
The Browse resource, off the Kimberly coast, contains an estimated 15.5 trillion cubic feet of recoverable gas and additional volumes of condensate, The Wall Street Journal reports.
Australia's LNG sector has been plagued by rising labor costs, infrastructure bottlenecks and the strong Australian dollar.
BHP's decision comes a week after Chevron announced that the cost of its Gorgon LNG project off the coast of Western Australia has increased by $15 billion, or 40 percent, to $52 billion, from an original estimate of $37 billion when the project was approved in 2009.
In August Chevron sold its interest in Browse, allowing Shell to increase its holding. Prior to that, in May, Japan Australia LNG bought its 14.7 percent stake in Browse from Woodside for $2 billion, reducing Woodside's holding in the project to 31.3 percent.
"With misaligned partners BHP and Chevron out of the project and Chinese and Japanese buyers in, the partnership is now effectively aligned on the development of Australia's last major greenfield LNG development," Bernstein Research analyst Neil Beveridge said in a note reported by Platts.
"The only outstanding uncertainty is now development cost, although the move by PetroChina (which appears to have a global gas alliance with Shell) would seem to indicate a confidence that the project can move ahead," Beveridge said.
The deal follows Canada's approval last Friday of Chinese state-run China National Offshore Oil Corp.'s $15 billion takeover of Canadian energy company Nexen Inc.
Bloomberg News says that Chinese companies have entered into investment ventures worth $25 billion in the oil and gas sector this year.
China's natural gas demand is expected to more than quadruple to 545 billion cubic meters by 2035, says the International Energy Agency. Under China's 12th five-year plan, imports are expected to fill 35 percent of China's gas needs by 2015, up from 15 percent in 2010.