China Petrochemical Corp has agreed to increase its stake in an Australian liquefied natural gas export venture and buy more output from the proposed project, underscoring the nation's increasing energy demand.

Sinopec Group, as China Petrochemical is known, signed an initial accord to raise its equity stake in the Australia Pacific LNG Pty to 25 percent from 15 percent, reducing the ownership of ConocoPhillips and Origin Energy to 37.5 percent each, according to a joint statement.

Sinopec also agreed to buy an additional 3.3 million tons of LNG per year through 2035 from the project in Queensland state.

In April, Sinopec signed an agreement with the venture to buy 4.3 million tons of LNG for 20 years starting in mid-2015. At the time, Sinopec paid US$1.5 billion for the initial 15 percent stake in the venture. The price of the next 10 percent won't be revealed until the sales deal is finalized.

Australiais on course to eclipse Qatar as the world's largest LNG exporter by 2020 as a number of liquefaction plants along its coastline are due to start operating later in the decade, owing to its substantial reserves and close proximity to Asia. However, such projects often face delays and cost overruns.

Origin Energy and ConocoPhillips in July approved the first phase of the US$20 billion two-train Australia Pacific venture, which aims to convert coal seam gas, an unconventional fuel, to LNG for export. Sinopec's investment is going to clear the way for an investment decision on the second phase.

"The strong equity participation does serve to mitigate the substantial counterparty risk that APLNG has taken on with Sinopec taking 88 percent of the project contracted volume," a Goldman Sachs report said.

Japanese utility Kansai Electric Power Co last month agreed with the venture to buy 1 million tons of LNG a year.

According to analysts, Chinese firms have also been investing in Australian projects to gain expertise in unconventional gas to help develop similar sources at home. PetroChina Co and Royal Dutch Shell are planning a LNG venture in Queensland after they acquired Arrow Energy, an Australian coal seam gas producer.

"We are very pleased to extend our relationship with Australia Pacific LNG, and in doing so, will further assist China and Sinopec to meet its growing energy demands," Sinopec Chairman Fu Chengyu said.