BG share price: Group assumes full control of Australian LNG facility

BG Group (LON:BG) had assumed full control of the first production facility, known as Train 1, at its Queensland Curtis liquefied natural gas (QCLNG) plant in Australia, the British gas producer announced today. The move marks the start of commercial operations at the site.

BG has already shipped 16 cargoes from the facility since its opening in December 2014. The second production site, Train 2, is currently under construction and is expected to start operations in the third quarter of this year, according to the FTSE 100-listed company.
In addition, BG reported that it had gained approval from equity partner China National Offshore Oil Company (CNOOC) for the sale of its QCLNG gas pipeline, pushing forward a $4.5-5 billion deal with APA Group announced in December. The transaction is set to conclude this quarter and proceeds from the sale will be used to reduce BG’s net debt and fund future growth.
The QCLNG plant is one of Australia’s biggest capital infrastructure projects, involving $20.4 billion of investment from 2011 to 2014. The Queensland site was even outlined by peer Shell (LON:RDSA) as one of the factors justifying its $70 billion buyout bid for BG.
According to a recent editorial by Reuters columnist Clyde Russell, the Shell-BG deal was most probably motivated by Shell’s desire to build on assets in LNG, particularly in Australia, where the perspective buyer has substandtial stranded gas reserves after it deferred a decision to build its own plant.
BG’s share price has edged higher today. By 14:18 BST, it had increased by 0.50 percent to stand at 1,166.06p. The stock has surged almost 35 percent since the beginning of the year, underpinned by the prospect of the Shell tie-up.
As of 15:04 BST, Thursday, 21 May, BG Group plc share price is 1,165.00p.