Australia's Origin Energy, Sinopec seal gas deal

Australia's energy company Origin Energy revealed on Monday that Australia Pacific LNG Pty, its joint venture with U.S. firm ConocoPhillips, had finalized a deal with Chinese oil company Sinopec for additional liquefied natural gas (LNG) supply and a further 10 percent equity interest.

Under the deal, Sinopec will subscribe for an additional 10 percent interest in the Australia Pacific LNG Project on Curtis Island in Queensland for 1.1 billion U.S. dollars.

"On completion, the ownership interest of Sinopec in Australia Pacific LNG will be 25 percent. As a result, ConocoPhillips' and Origin Energy's ownership interests will be reduced to 37.5 percent respectively," Origin said in a statement.

The deal also means Sinopec will buy an extra 3.3 million metric tones of LNG a year for 20 years, making it the largest gas supply agreement in Australian history.

"With the marketing of the second train now complete, Australia Pacific LNG is on track to make a final investment decision on the second train in early 2012," Origin Energy Chairman Kevin McCann said.

In a statement, Sinopec chairman Fu Chengyu welcomed the arrangement.

"The Sale and Purchase Agreement with Australia Pacific LNG is an important part of Sinopec's energy portfolio, and will help us to ensure long-term gas supply for the growing demand in the Chinese market," he said.