BG Group said to buy Queensland Gas

SYDNEY (Reuters) - Energy firm BG Group will buy Australian coal seam gas firm Queensland Gas Co in a deal worth up to A$5 billion (1.9 billion pounds), The Australian Financial Review reported on Saturday.

Energy utility firm AGL Energy, which made a failed takeover bid for Queensland Gas in 2007, has agreed to sell its 24.9 percent stake, the newspaper said. AGL has been selling off a number of non-core assets in recent months in a bid to reduce debt.

Although details have not been officially announced, the Review said BG Group was likely to offer about A$5.45 per share cash for its joint venture partner, a substantial premium to the A$3.20 Queensland Gas was trading at before a trading halt on Friday.

Details could be announced as early as Monday, the newspaper said.

Under the deal, BG would agree to guarantee gas supply from Queensland Gas's coal-seam ground to help supply AGL's domestic needs.

BG already holds a stake of 9.9 percent in Queensland Gas, purchased earlier this year under a A$870 million alliance to develop a coal-seam gas-fed LNG plant near Gladstone in Australia's northeastern state of Queensland.

The company was recently defeated in a separate A$13.8 billion takeover bid for another coal-seam gas company, Origin Energy.

As of Friday, Queensland Gas had a market capitalisation of just under A$3 billion.

(Reporting by Chris McCall; Editing by Ben Tan)