By the OGJ Online Staff
LONDON, Oct. 10 -- Chinese National Offshore Oil Corp. (CNOOC) said Wednesday it has signed an agreement with Shandong Province authorities to build a gas pipeline network and a LNG production facility.
Technical and financial details were not released. However, the investment will be substantial.
China Petrochemical Corp. (Sinopec) recently signed a framework agreement with Shandong Development Planning Committee jointly to build a natural gas pipeline network and develop a natural gas market in that province (OGJ Online, Sept. 18, 2001).
PetroChina Co. also said it plans to build a $36 million natural gas pipeline to Cangzhou and Zibo City in Shandong Province (OGJ Online, Aug. 28, 2001).
CNOOC officials earlier said they were considering building LNG terminals in Fujian and Shandong provinces (OGJ Online, Sept. 14, 2001).
Although the latest announcement did not mention Shell Exploration China Ltd., it could become involved in the project. Shell Exploration recently formed a joint study with CNOOC's Hong Kong-based subsidiary CNOOC Ltd. to examine options and plans for developing reserves in the Bonan Block of Bohai Bay.
CNOOC Ltd. has been developing gas reserves in Bohai Bay, close to Shandong, and planned to supply gas from the Bonan area to the cities of Yantai and Qingdao via Longkou in Shandong province. Shell China has a working relationship with CNOOC Ltd. Neither company would add to the statement issued by CNOOC in Beijing.
The announcement from Beijing was channeled through CNOOC Ltd., which has the option to take its parent's working interest in potential investment projects that may be generated in the wake of the pipeline and LNG developments.
CNOOC Ltd. was incorporated in Hong Kong in August 1999, and is the dominant producer of oil and gas off China.