The partners behind Australia Pacific Liquefied Natural Gas (APLNG) have agreed to share infrastructure on a long-term basis with Queensland Curtis Liquefied Natural Gas (QCLNG).

APLNG, a joint venture between ConocoPhillips (NYSE:COP) (37.5 percent), Origin Energy (ASX:ORG) (37.5 percent) and Sinopec (NYSE:SNP) (25 percent), will also secure extra gas supply from QCLNG.

The main focus of APLNG is developing “substantial” coal seam gas resources in the Surat and Bowen basins, along with a 530-kilometer transmission pipeline and a multi-train LNG facility on Curtis Island near Gladstone, Queensland.

Under tolling agreements, the QCLNG project will be able to use available capacity in existing APLNG/QCLNG joint infrastructure to transport and process gas and water from the Arrow Energy (ASX:AOE) Surat Basin fields.

The infrastructure-sharing agreements are set to start in 2020 and continue until 2035, with the option to extend until year-end 2049.

Additionally, APLNG has agreed to secure up to 350 petajoules of gas from the QCLNG project, with the company set to buy the gas at an oil-linked price over 10 years from 2024.

According to the company, the purchasing agreement will help diversify and strengthen APLNG’s gas portfolio. The arrangements are also subject to Arrow Energy making certain investment decisions in developing its Surat Basin fields.

“We are very pleased to work collaboratively with QCLNG, paving the way for the development of significant new gas supplies in Queensland,” APLNG CEO Warwick King said in a statement.

“Australia Pacific LNG has taken the opportunity to grow and diversify our gas portfolio, while the tolling agreements with QCLNG allows us to maximise value from our investment in existing infrastructure. These arrangements demonstrate the industry’s determination to develop more gas for the market, in the most efficient way possible so we can keep costs down,” he added.

APLNG is Queensland’s largest LNG project and one of the domestic market’s biggest suppliers, supplying close to 30 percent of total east coast gas demand in 2018.

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Securities Disclosure: I, Olivia Da Silva, hold no direct investment interest in any company mentioned in this article.