Australia, China formalize LNG sales deal

Australia and China formalized Friday a A$25 billion deal to supply China with liquefied natural gas from the country's North West Shelf project, which was initially agreed to in August.

"The contract covers the supply of 3.3 million tons per annum of gas over 25 years," Australia's minister for industry, tourism and resources Ian Macfarlane said in a statement.

"The signing of the contract marks the beginning of a long-term partnership with the Chinese on energy and builds on our existing successful trade and investment relationship," Macfarlane said.

"It is likely this project will lead to the additional investment in a fifth LNG processing train for the North West Shelf facilities on Western Australia's Burrup Peninsula," he said.

The North West Shelf comprises three processing trains with a fourth processing train under construcion. The partners in the shelf haven't yet committed to their plans for a fifth processing train.

Deliveries to a receiving terminal to be built in Guangdong, China, are due to start in late 2005.

The North West Shelf is an equal joint venture comprising Australian-based Woodside Petroleum Ltd. as operator, Royal Dutch/Shell Group , ChevronTexaco Corp. , BHP Billiton Ltd. , BP PLC , and Japan Australia LNG, itself an equal joint venture between Japan's Mitsubishi Corp. and Mitsui & Co.

In a separate statement Woodside Managing Director John Akehurst said the shelf is committed to being a reliable supplier to China.

"We have significant gas resources, backed by the reliability of our integrated gas plant," he said.

North West Shelf won Guangdong gas`deal after beating Tangguh LNG, which is operated by BP . (*)