Australia's first LNG shipment to China due mid-2006

Rick Wilkinson
OGJ correspondent

MELBOURNE, Dec. 14 -- Australia's first shipment of LNG to China will leave the North West Shelf Project's (NWSP) Burrup Peninsula liquefaction plant in Western Australia in mid-2006.

The arrangements were completed in Perth this week when the North West Shelf Gas Joint Venture participants signed a $25 billion (Aus.) LNG sales and purchase contract (SPC) with Guandong Dapeng LNG Co. of China.

The contract is for the supply of as much as 3.3 million tonnes/year of LNG over 25 years to the Guandong receiving terminal under construction in China, the first such plant to be built in the country.

The deal springs from a conditional SPC signed in October 2002 when NWSP won the right to be the first supplier of LNG to China after beating strong international competition. As part of the deal CNOOC Gas & Power, China's national energy company, will acquire 5.3% interest in the gas reserves in the NWSP, which is operated by Woodside Petroleum Ltd. of Perth. In addition, shipping arrangements will be through a joint venture of Chinese and Australian companies.

NWSP details
Earlier this year NWSP brought on stream its second offshore gas pipeline and its fourth LNG train at the Burrup Peninsula facility to bring its total production capability to 11.7 million tonnes/year of LNG. This will enable it to serve the new Chinese contract as well as its existing contracts with buyers in Japan.

A fifth LNG train, capable of producing a further 4.2 million tonnes/year, is under consideration with a final investment decision expected by mid-2005.

The six equal NWSP partners are BHP Billiton Petroleum Pty. Ltd., BP Developments Australia Pty. Ltd., ChevronTexaco Australia Pty. Ltd., Japan Australia LNG (MiMi) Pty. Ltd., Shell Development (Australia) Pty. Ltd., and Woodside Energy.

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