PetroChina and ExxonMobil yesterday agreed on a liquefied natural gas (LNG) contract worth S$41.29 billion, making it the biggest trade deal ever between China and Australia. Under the terms of the deal PetroChina will purchase 2.25 million tons of gas per year for 20 years.

PetroChina will buy LNG from Exxon's share of the massive Gorgon project in Western Australia. Gorgon is operated jointly by Chevron (CVX), Exxon and Royal Dutch Shell (RDS.A). Each has a 25 percent share in the output, which could total 15 million tons per year.

The agreement is testimony to the strength of Australia's continuing trade and investment relationship with China, Australia's Minister for Resources and Energy Martin Ferguson said yesterday.

In April 2008, Sinopec, Qatargas and Shell signed binding sales and purchase agreements on a 25-year supply of LNG, amounting to 3 million tonnes per annum. In November the same year, PetroChina signed a 20-year sales and purchase agreement to import 2 million tonnes of LNG per annum from Royal Dutch Shell.

For more details, please read the full Chinese coverage at:

http://paper.people.com.cn/gjjrb/html/2009-08/19/content_322965.htm

(China.org.cn by Wu Nanlan August 19, 2009)