China National Offshore Oil Company Ltd (CNOOC Ltd), the nation's largest offshore oil and gas producer, said it has agreed with Australia LNG (ALNG) to establish a joint venture to develop natural gas in Australia.
But if Australia LNG fails to win the bid for a US$10 billion LNG (liquefied natural gas) supply contract for China's first LNG project, which is led by CNOOC Ltd's parent, the joint venture deal will be terminated, according to Alf D'Souza, vice-president of ALNG.
CNOOC said in a statement it released late on Tuesday that the joint venture, China LNG JV, will invest in Australia's Northwest Shelf Gas Project - the largest gas development project in Australia - for producing and liquefying natural gas that targets the Chinese market.
Wei Liucheng, chairman of CNOOC Ltd, said: "CNOOC has long expressed desire to secure upstream assets for LNG import.
"We are looking forward to similar agreements with all other potential suppliers."
Possible bidders include Indonesia, Iran, Malaysia, Qatar, Russia, Yemen and Australia LNG, all of which have been invited to make offers for the US$10 billion supply contract of China's LNG terminal in Shenzhen, South China's Guangdong Province.
They will compete to supply 3 million tons of LNG to feed the terminal annually for at least 20 years. CNOOC Ltd's parent, CNOOC, led the construction of the terminal which will turn imported LNG back to gas.
Industrial analysts said the Chinese Government favours those bidders willing to offer equity in the gas fields to Chinese companies.
But both CNOOC and Australia LNG denied that there is any direct link between the deal and the bidding.
"We are pleased to satisfy CNOOC's aspiration to take an equity in our gas fields, but there is no immediate bearing for selecting of the bidding," said D'Souza.
(China Daily November 22, 2001)
