By the OGJ Online Staff
LONDON, Nov. 20 -- Australia's North West Shelf (NWS) LNG project partners have signed an agreement under which China eventually will take a stake in the project and LNG will be exported to China for the first time.
The partners have also won a contract to supply another Japanese electricity utility.
The agreement with China National Offshore Oil Corp. Ltd. (CNOOC Ltd.) is politically significant as its takes China into the international LNG market for the first time and underlines its intention to use its Hong Kong based subsidiary as an vehicle for future international investment.
CNOOC Ltd., the operational arm of the Chinese state oil company, has agreed to invest in the development of Australia's North West Shelf gas project for the sale of LNG to China markets. No financial details of the agreement have yet been released, but it is likely that timing of the agreement will be linked to progress on the Guandong LNG project on mainland China.
Wei Liucheng, chairman and CEO, said, "CNOOC Ltd. has long expressed desire to secure upstream assets for LNG import. We are looking forward to similar agreements with all other potential suppliers."
CNOOC Ltd. is a 70.6% held subsidiary of China National Offshore Oil Corp. CNOOC Ltd. is the sole vehicle through which China carries out oil and gas exploration, development, and production activities offshore China and internationally.
The partners in the project also announced agreement on key terms with Chubu Electric Power Co. Inc. of Japan. The agreement covers the supply of 600,000 tonnes/year for a long-term period starting in 2009. The parties will now move to finalize a sale and purchase agreement.
The agreement with Chubu Electric follows recent letters of intent with other Japanese customers. Tokyo Gas Inc., Toho Gas Inc., and Osaka Gas Inc. will each take 1 million tonnes/ year from 2004. Tohoku Electric Co. Ltd. will take 400,000 tonnes/year from 2005, and Kyushu Electric Power Co. Inc. will take 500,000 tonnes/year from April 2006.
In April this year the NWS partners announced approval for a fourth train expansion of the LNG facilities on the Burrup Peninsula in Western Australia.
Woodside Energy Ltd. is operator of the project. Other partners are BHP Billiton Pty. Ltd., BP Developments Australia Pty. Ltd., TexacoChevron Australia Pty. Ltd., Japan Australia LNG (MIMI) Pty. Ltd., and Shell Development (Australia) Pty. Ltd. Each partner has a 16.67 % stake in the project.
