**Check against delivery
Acknowledgements:
- Duke of York
- China National Offshore Oil Corporation Chairman and Chief Executive Officer - Mr Fu Chengyu
- BG Chief Executive Officer: Mr Frank Chapman
- Deputy Head of China's National Energy Administration: Mr Liu Qi
- Ambassador Wood
- Ambassador Raby
Ladies and gentlemen,
It gives me great pleasure to be with you in Beijing to celebrate what is a very good day for Australia, for China, and for the United Kingdom.
I would like to start by congratulating BG Group and the China National Offshore Oil Corporation for reaching this very significant agreement.
CNOOC is already a welcome and important member of Australia's business community with an equity stake in the gas resources of the North West Shelf Gas Project and we are pleased to see its investment in Australia growing.
CNOOC was indeed the very first buyer of Australian LNG for the China market with first deliveries in 2006.
For the BG Group, this will be its largest Australian investment and we look forward to a long and mutually prosperous relationship.
Today's agreement is a very important vote of confidence in the future of the coal seam gas-based LNG industry.
This not only paves the way for a new LNG province on Australia's east coast at Gladstone in Queensland, it is a world first for coal seam gas.
Queensland's coal seam gas resources are estimated to at around 150 trillion cubic feet.
The Australian Government appreciates the significance and scale of what you are seeking to achieve in Gladstone.
This project will provide enormous wealth and employment to our country for many decades to come.
At the same time, it will provide a reliable and secure supply of clean energy to underpin China's growth for the long term.
At least $10 billion will be invested in this project over the next four years, which will create 5,000 construction jobs and a wealth of opportunity for Australian businesses.
Australia is one of only three net energy-exporting countries in the OECD and it has a vital role to play in global energy security in the 21st century.
This agreement also demonstrates confidence in Australia's attractiveness as an internationally competitive and safe destination for global capital.
As a cleaner-burning alternative to coal, LNG has a key role in the transition to a low carbon economy:
- Improving urban air quality;
- Reducing greenhouse emissions; and
- Strengthening energy security in our region.
It's no surprise that global demand for LNG is expected to double by 2030.
Or that natural gas and LNG are key parts of China's future energy mix.
Just as we are investing in new LNG production, China is rapidly expanding its LNG receiving capacity to cope with growing demand for cleaner energy.
The Australian Government is very pleased to see that in addition to the three operating LNG receival terminals, China has four more under construction and at least another eight terminals being planned.
At the same time, we have a number of LNG projects under construction or at advanced stages of planning - Pluto, Gorgon, Ichthys, Prelude, Browse, Sunrise, Wheatstone, and of course the Gladstone LNG projects.
I simply say that I hope Australian LNG is the predominant source of supply for China's new terminals.
Trade with China
Resources are the backbone of Australia's trading relationship with China.
- Mineral and energy exports account for three-quarters of our merchandise exports to China, worth more than $33 billion last financial year;
- One-third of Australia's mineral exports go to China; and
- China is our second-largest trading partner for LNG.
Australia is committed to strengthening that relationship and being an important partner in our region's economic growth.
Australia's trading relationship with China is healthy and mutually beneficial.
In 2008-09, more than $26 billion of Chinese investment was approved in the Australian resources sector.
I am pleased to say that CNOOC's investment in the Queensland Curtis LNG project is one of the investments approved by the Australian Government.
So business is good and set to get better.
Just as the Japan-Australia trade and investment relationship matured and grew into a lasting friendship over the last 50 years, so will the China-Australia relationship.
Our aim is to be the region's premier supplier of minerals and energy resources and of related services.
Australia is the world's largest exporter of iron ore.
We are also the world's largest exporter of coal, the second largest exporter of uranium, and fifth for LNG.
Infrastructure and skills
The Australian Government is also determined to make sure the capacity of our workforce and our infrastructure keeps pace with demand.
We know that, if we do not act, productivity will slip and export opportunities will be missed.
We are also investing in the ports, roads and railways to get the resources to the buyers more quickly and cost-effectively.
The Australian Government has started work on Australia's first ever National Port Strategy, and a National Freight Strategy.
The Australian Government is investing hundreds of millions of dollars in new infrastructure for the resources sector to prevent the bottlenecks which frustrated customers in the past.
Conclusion
Ladies and gentlemen, Australia is a reliable and secure supplier of energy resources.
The agreement we celebrate today builds on that success.
This is a pioneering enterprise of great importance to Australia's energy industry and to China's energy security.
Today's agreement represents a good deal for Australia, for China, and for the UK, and makes our strong trading relationship even stronger.
I wish the partners every success with the project.