APLNG gets Kansai offtake deal in the bag

THE Australia Pacific LNG joint venture may give the go-ahead for a second train at the project very soon after firming up Japan’s Kansai Electric Power as a customer.
APLNG gets Kansai offtake deal in the bag APLNG gets Kansai offtake deal in the bag APLNG gets Kansai offtake deal in the bag APLNG gets Kansai offtake deal in the bag APLNG gets Kansai offtake deal in the bag

The JV signed a sale and purchase agreement for the supply of about 1 million tonnes per annum of LNG to Kansai for 20 years, starting in 2016.

The agreement follows on from the signing of a heads of agreement last November and is conditional upon APLNG making a final investment decision on a second train for the project.

APLNG flagged FID by mid-2012 while last week Macquarie Equities said the go-ahead for a second train was imminent, placing a "soft" deadline of June 30.

"This binding long-term supply agreement with Kansai Electric indicates the strength of demand for LNG from Asia and marks another significant milestone in the Australia Pacific LNG project's progress towards a two-train development," APLNG chairman and Origin Energy managing director Grant King said.

Last July, APLNG committed to the $US14 billion first phase of the project, which consists of the development of the first 4.5MMtpa train, with infrastructure to support a second train.

The first train is underpinned with a binding 4.3MMtpa offtake deal with Sinopec, which also holds a 25% stake in the project. In January Sinopec decided to lifts its offtake of LNG from the project to 7.6MMtpa.

The second train is expected to cost another $6 billion.

Origin Energy and ConocoPhillips each hold a 37.5% stake in the project.

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