UPDATE: BG Group Seals LNG Sales Pact With Chubu Electric

BG Group PLC (BG.LN) said Friday it has signed a binding deal to sell up to 122 cargoes of liquefied natural gas to Chubu Electric Power Co. (9502.TO) over 21 years, starting in 2014.

LNG will be provided from BG's global portfolio, including gas processed through the proposed US$15 billion Queensland Curtis LNG project in Australia's Queensland state.

Signing of the sale and purchase agreement concludes negotiations announced in October when Chubu said it had inked a preliminary deal to buy a maximum of 120 shiploads, or about 8.4 million metric tons, of LNG over 20 years from BG.

The British company's development is among four slated for the port of Gladstone vying to be the first in the world to convert gas trapped in coal seams to LNG for export by tanker.

China National Offshore Oil Corp. and Tokyo Gas Co. (9531.TO) are the project's largest customers.

Separately, BG is hopeful it will be able to resume work on a pipeline connecting onshore gas fields to the development in the next few weeks.

It stopped clearing land for the 550 kilometer pipeline on March 17 after realizing it hadn't received final regulatory approval for its soil and species management plans.

"We continue discussions with regulators and are hopeful work on clearing the easement can resume in a couple of weeks," a BG spokesman said in an e-mailed statement.

The delay isn't expected to have a material impact on the project's scheduled completion date of 2014, the spokesman said.

-By Ross Kelly, Dow Jones Newswires; 61-2-8272-4692; [e-mail]