Eric Watkins
Senior Correspondent
LOS ANGELES, Jan. 24 -- Talisman Energy Inc. has settled a legal dispute with CNOOC Ltd. over Indonesia's Tangguh LNG project, according to reports.
China Business News said Talisman will pay $40 million to CNOOC for a 2% stake in the BP PLC-led project, which will supply CNOOC's Fujian LNG terminal.
According to earlier reports sent through Talisman's Fortuna Resources unit, Talisman had claimed the right to 44% of CNOOC's 17% interest in the Tangguh project.
Lawrence Bernstein, senior manager for exploration at Talisman's Malaysian unit, told China Business News he believed the dispute had been settled although he had yet to be officially notified.
The reported settlement coincided with news that CNOOC has started building two new gas storage tanks at its Fujian LNG terminal. The two tanks, expected to be completed in 2011, will boost the terminal's storage capacity to 640,000 cu m, the company said in a statement.
Phase I of the Fujian LNG terminal, which involves total investment of 21.9 billion yuan, includes two new gas storage facilities; three gas-fired electric power plants in Putian, Jinjiang, and Xiamen; and distribution facilities in five cities.
CNOOC signed a deal in 2006 to source gas for the Fujian terminal from BP's Tangguh field in Indonesia, which is due to start operating in 2009.
The company will supply 2.6 million tonnes/year of LNG for 25 years to Fuzhou, Putian, Quanzhou, Xiamen and Zhangzhou, and will also supply the fuel for three gas-fired power plants in the province.
Contact Eric Watkins at [email protected].