Herbert Smith Freehills has advised long-standing Chinese oil and gas client, China National Offshore Oil Corporation (CNOOC) on the acquisition of additional interests in the Queensland Curtis LNG project, Australia (QCLNG) and new exploration acreage in the Bowen Basin and CNOOC on the purchase of increased volumes of Liquid Natural Gas (LNG).
The signing ceremony on Monday 6 May in Brisbane was attended by senior officers from CNOOC and BG Group plc and their affiliates as well as the Australian Minister for Resources and Energy, the Honourable Gary Gray MP, the Deputy Premier of Queensland, the honourable Jeff Seeney MP, and the Queensland Minister for Natural Resources and Mines, the Honourable Andrew Cripps MP.
Under the deal, BG Group will supply CNOOC with a further five million tonnes per annum (mtpa) of LNG for 20 years beginning in 2015, sourced from the Group’s global portfolio.
Also, CNOOC will purchase interests in the Surat and Bowen Basin coal seam gas tenements and related infrastructure and a further equity stake in the QCLNG project Train 1 liquefaction facility for $1.93 billion. Completion of these acquisitions is expected to occur by the end of the year.
Herbert Smith Freehills’ London, Perth, Beijing, Hong Kong, and Brisbane offices have been involved in this project for a number of years, having advised CNOOC on different aspects of the project since it first acquired its initial interest in QCLNG in 2010. This phase of the project – which sees CNOOC take a 25% interest in the upstream (currently only 5% in some of the fields) and increase its stake from 10% to 50% in the midstream – enabled the newly-merged Herbert Smith Freehills to provide a combined offering for all workstreams.
Herbert Smith Freehills’ oil and gas partner Anna Howell led the London-based team advising on the portfolio LNG SPA as well as arrangements relating to gas sales and transportation, the LNG plant and processing, and LNG sales and transportation, with support from senior associates Amos Carrington and Sarah Pollock, and associate Yida Xu. Associate Hao Su provided support in Beijing.
Stuart Barrymore led the Australian based team advising on the acquisition component as well as revised arrangements governing exploration and development of the gas fields, with support from senior associate Michael Boyce and associate Jane Ballard.
Partners Matt Bull, Brisbane, Hilary Lau, Hong Kong and Nick Heggert (Greenwoods & Freehills in Perth) provided additional support on Australian gas pipeline regulation, upstream and stamp duty, respectively.
Anna Howell commented:
“We are delighted to have advised CNOOC on the latest phase of this high-profile and strategically-important project. This deal marks a significant step forward for both the QCLNG project and the wider LNG industry in the region, showcasing the strength and breadth of Herbert Smith Freehills’ offering for international energy companies such as CNOOC.”
Stuart Barrymore complimented the parties noting that “The complexities and intricacies of the arrangements required multiple teams in different locations and time zones to work cooperatively to meet the transaction schedule and to achieve today’s outcome.”
King & Wood Mallesons advised QGC.
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