Sinopec will pay $1.1b to up Australian stake

China Petrochemical Corp has agreed to pay $1.1 billion (Dh4 billion) to increase its stake in an Australian liquefied natural gas development led by Conoco-Phillips and Origin Energy. Sinopec Group signed a binding accord to boost its holding in the Australia-Pacific LNG venture to 25 per cent from 15 per cent, Sydney-based Origin said yesterday in a statement. The state-owned Chinese company will buy a further 3.3 million metric tonnes of LNG annually for 20 years, taking its total commitment to 7.6 million tonnes a year. China plans to more than double its natural gas consumption to cut its dependence on coal and oil. With the completion of the Sinopec Group deal initially announced last month, China has contracts to purchase more than 18 million tonnes of Australian LNG annually, Energy Minister Martin Ferguson said. \"Any number that doubles in China is a huge number,\" Origin Managing Director Grant King said. \"The diagnosis is for robust growth in demand.\" The Sinopec Group transaction clears the way for a final investment decision on the second phase of the $20 billion coal seam gas-to-LNG venture in Queensland state. The companies expect to approve the second stage in \"early 2012,\" Origin said today. Origin shares fell 0.1 per cent to A$13.55 at the close of trade in Sydney, compared with a 0.3 per cent decline for benchmark S&P/ASX 200 Index. Preliminary agreement The Chinese company signed the preliminary agreement last month to acquire an additional 10 per cent of the Australian project and to buy more of the fuel. Ties with China have \"continued to build\" since Australia started exporting LNG to China from the North West Shelf venture in May 2006, Ferguson said.