Liquefied Natural Gas has agreed to sell the entire Fisherman's Landing gas export project in Queensland to Arrow Energy for a combination of cash, milestone payments, royalties and Arrow options.

Arrow Energy Ltd will take over the $3 billion Fisherman's Landing project in Queensland after buying out its joint venture partner, Perth-based Liquefied Natural Gas Ltd, for a combination of cash, royalties, milestone payments and Arrow options.

Arrow will reimburse costs incurred to date of $45 million and pay $US10million as licensing fee at the first LNG train's completion, and $US10million more for each extra train, said LNG.

LNG Ltd's subsidiary Gladstone LNG Pty Ltd will be acquired by Arrow for $51 million. This includes options to acquire 12.5 million Arrow shares at an exercise price of $3.50 per share. LNG Ltd. will also be paid $24 million after a final investment decision is made, a $US5 million ($A5.64 million) licensing fee for the use of its technology, and $24 million when the plant reaches a production rate of one million tons per annum (Mtpa).

LNG Ltd shares had jumped 6.5 cents, or 9.35 per cent, at 76 cents, while shares in Arrow had gained four cents, or 1.18 per cent, to $3.44 at 1222 AEDT.