Under the agreement, Bechtel will immediately start front-end engineering and design of the plant, which will initially have one train capable of producing between 3-4 million tonnes of LNG per annum with potential expansion using additional trains for production of up to 12MMtpa.

This will be followed by a final investment decision in early 2010 before procurement and construction work begins. First LNG production is planned for late 2013.

"BG Group and Bechtel have had a long association and have constructed a total of six

LNG trains in which BG has an interest in Egypt and Trinidad and Tobago," BG executive vice president of the Americas and global LNG Martin Houston said.

He added Bechtel had also built the Darwin LNG plant, giving it the local experience base it needed to carry out the project.

As part of the engineering work, Bechtel will refine its development of the ConocoPhillips Optimized Cascade Process, which QGC and BG say is best suited to a plant supplied by coal seam methane.

The cascade process was first used in Alaska at the Kenai LNG plant built by Bechtel in 1969.

QGC managing director Richard Cottee added that Queensland Curtis LNG remained on schedule to be the first LNG plant in the world to use CSM.

The project also includes the expansion of QGC's CSM operations in the Surat Basin; the development, construction and operation of a 360km gas pipeline - capable of supplying gas for three LNG trains - to link the fields to the plant; and the development, construction and operation of an LNG processing plant and export facility.

QGC has an 80% stake in the CSM fields, a 50% operating interest in the pipeline and a 30% stake in the LNG plant while BG holds the remaining interests.

While QGC has yet to prove up the targeted gas reserve base of 7000 petajoules of 2P (proved and probable) reserves to supply the project, its recent 2P reserve upgrade to 2370PJ, as well as ongoing development work, places the company on track to meet its target before the final investment decision in 2010.

BG will buy and market all LNG produced by the plant and may have also found a customer for the LNG after beating Woodside and various Qatari suppliers to win a contract to supply Singapore's first LNG terminal.