French oil and gas giant Total SA said yesterday it had signed an agreement with China National Offshore Oil Corp for the sale of liquefied natural gas to China.
Under a heads of agreement, up to 1 million tons of LNG will be delivered to CNOOC annually starting in 2010, Total said. The gas will be sourced from Total's global LNG portfolio, based on its participation in over 10 liquefaction projects worldwide, and on its trading activities.
A heads of agreement (HoA) is a non-binding document which provides the basis for further discussion and the drawing up of a fully-termed deal.
"The HoA illustrates the confidence both parties have in the future of the Chinese natural gas industry," Total said. "LNG imports will be decisive to secure its rapid growth, particularly in the fast developing coastal areas of China."
CNOOC, which leads China's fast-growing LNG market, had in 2006 signed several framework contracts to buy spot LNG from foreign firms including Total and Suez SA in a bid to stabilize imports, which are mainly arranged under long-term contracts.
The latest HoA was the first concrete application of a broader newly-signed memorandum of understanding between the two energy majors, which aims to enhance wide-ranging cooperation in the areas of upstream, downstream as well as in new energies.
Total said it wants to further enhance its cooperation with CNOOC inside and outside China. CNOOC's listed unit, CNOOC Ltd, already has a 45-percent stake in Total's Akpo oil field project in Nigeria.
Total has been present in China for about 30 years through activities of exploration and production, gas, refining and marketing, and chemicals. Total's strategy in China is a long-term one, Jacques de Boisseson, chairman of Total China said last week.
He said Total was studying the opportunity to take a stake in a proposed refinery by Sinochem Corp in Fujian Province, among other projects.
(Shanghai Daily June 17, 2008)
