Sinopec Group has signed a 20-year binding agreement with Australia Pacific LNG (APLNG) to increase annual liquefied natural gas purchases from 4.3 million tons to 7.6 million tons, starting in 2016.
Sinopec Group also inked an equity subscription agreement to raise its stake in APLNG from 15% to 25%, the company said.
The stakes of Origin Energy and ConocoPhillips will drop to 37.5% each as a result of the deal, which is still subject to approvals by the Chinese government and the Foreign Investment Review Board of Australia, it said.
An agreement reached in April between APLNG and Sinopec covered the sale of 4.3 million tons of LNG for 20 years starting in mid-2015. At the time, Sinopec subscribed for a 15% equity interest in APLNG.
"We are pleased to expand our partnership with Australia Pacific LNG. The agreement will help to further meet both China's and Sinopec's energy demands, and to ensure the supply of clean energy for Chinese consumers," Sinopec Chairman Fu Chengyu said in the statement.
The first phase of the APLNG project involves plans to build two production lines, each with the production capacity of 4.5 million tons per year. The first line is expected to be operational by 2015, the company said.
"Australia Pacific LNG is on track to make a final investment decision on the second production line in early 2012," Origin Energy's Chairman Kevin McCann said in the statement.
Sinopec Group is the parent of Shanghai-listed and Hong Kong-listed China Petroleum & Chemical Corp (Sinopec Corp).