CHINA'S largest offshore oil producer said yesterday it has inked an agreement to buy liquefied natural gas from BG Group and increased its stakes in a LNG project in Australia.

Under the contract, the China National Offshore Oil Corp will buy 5 million tons per annum (mtpa) of LNG, starting in 2015, from BG Group's global LNG portfolio for 20 years.

By then, the CNOOC's mid-and-long-term LNG contracted volumes will reach 21.6 mtpa, the company said in a statement on its website.

CNOOC will also buy a 40-percent interest in QCLNG Train 1, increasing its equity ownership from 10 percent to 50 percent for US$1.93 billion.

It will acquire a 20 percent equity interest in the reserves and resources of certain BG Group tenements in the Walloons Fairway region of the Surat Basin, Queensland, lifting its equity ownership from 5 percent to 25 percent. It will acquire a 25 percent equity interest in certain other upstream tenements held by BG Group in the Surat and Bowen Basins, Queensland.

CNOOC and the BG Group will also jointly invest in building two more LNG transport ships in China.

Those transactions will be completed by the end of this year.

"These new agreements with BG Group will not only substantially enhance the partnership in QCLNG, but also facilitate the construction of CNOOC's overseas production base of LNG," Wang Yilin, chairman of CNOOC, said.