CHINA has agreed to make one of its biggest recent investments in Australia, with China National Offshore Oil Corp inking a $US6 billion ($5.7bn) deal to take a one-quarter stake in BG Group's Queensland Curtis LNG project being built at Gladstone to export coal-seam gas.

Associated with the deal is a $US60bn-plus LNG supply deal, where CNOOC will buy five million tonnes a year of LNG from BG's global gas portfolio for 20 years, making the British company the biggest supplier of the fuel to China.

This will not come directly from Gladstone, but means a large proportion of QCLNG gas is likely to make its way to China.

Last night, BG said it had signed a heads of agreement with CNOOC for the $US1.93bn sale of a stake in onshore CSG ground and a 40 per cent interest in one of two LNG trains that are being built at Gladstone.

CNOOC will also reimburse BG between $US3bn and $US4bn for construction costs on the $US20bn project, which is scheduled to produce the nation's first CSG exports in 2014.

The move, when it is finalised, will increase CNOOC's overall stake in the project from 5 per cent to 25 per cent and make it the biggest Chinese owner of LNG assets in Australia. If a third LNG train is approved, which is becoming less likely as BG focuses its LNG growth on North America, CNOOC will be able to participate as a 25 per cent partner.

CNOOC also has an interest in the big North-West Shelf LNG project on Western Australia's Burrup Peninsula.

The deal comes amid concerns that the flow and size of Chinese investments in the resources sector are dropping. According to a recent King Wood Mallesons study, only eight deals involving Chinese companies had been struck this year, half the level two years ago.

Of recent Chinese bids for Australian mining companies, there has been a focus on companies with assets in Africa rather than Australia, which China is more and more seeing as a tougher place to do business.

BG said the CNOOC deal would be conditional on government and regulatory approvals, which would include that of the Foreign Investment Review Board.

BG had flagged a selldown of its stake in QCLNG as part of a rationalisation of its global assets.

"Our agreement today to sell an interest in part of the QCLNG project to CNOOC means that we have now completed or reached asset sales agreements that should release a total of $US7.6 billion of capital by mid-2013," chief executive Frank Chapman said.

Earlier in the year, BG suffered a $US5bn cost blowout on QCLNG as it was hit by a higher Australian dollar and construction inflation. Last night, Sir Frank said the project was on schedule and budget.

"In Australia, we continue to make good progress with our Queensland Curtis LNG project, keeping it on track for first LNG in 2014," he said. "We now have contracts and other agreements in place for more than 90 per cent of the project scope to 2014, and we reconfirm the $US20.4bn capital budget."