BP to supply LNG to Fujian: Report
Saturday, July 1 2006 - 02:34 AM WIB
"We have reached an agreement (with China National Offshore Oil Corp) on the company level, and we're waiting for final approval from the Indonesian Government," Heather R. Ting, president of BP Gas China, told China Daily on Friday in Beijing after a ceremony launching the BP Statistical Review of World Energy 2006.
The deal could be finalized "in months," said Ting, who refused to comment on prices agreed on the supply of LNG.
Rising gas prices have prolonged talks between China's biggest offshore oil producer China National Offshore and the BP-led Tangguh project, with its rich gas reserves, which is set to supply 2.6 million tons of LNG annually for 25 years to the Fujian terminal invested by the Beijing-based oil firm.
A Reuters report on Wednesday said China National Offshore expected to reach an agreement with Indonesia by the end of July, and the final price could be US$5-10 per million British thermal units, the report cited company President Fu Chengyu as saying.
Liu Junshan, spokesman for the Chinese oil producer, on Friday said he was not aware of the updated situation.
State-owned China National Offshore is leading the race to build LNG terminals along the eastern coast of China as the government aims to diversify energy supplies and reduce its heavy reliance on coal and oil, instead pushing the use of cleaner natural gas.
Beijing so far has approved the construction of two terminals, one each in Fujian and South China's Guangdong Province. Both are owned by China National Offshore.
The State-owned company's Guangdong LNG terminal received the second shipment of liquefied gas on Wednesday from Australia's North West Shelf venture under a A$25 billion (US$19 billion) 25-year contract.
Construction of China National Offshore's Fujian LNG facilities is expected to be completed by 2007, with an initial capacity of 2.5 million tons a year.
The Tangguh project, located in Papua of Indonesia, is scheduled to come on stream by late 2008, drawing its gas supplies from six fields in the Bintuni area.
China's top three oil companies, PetroChina, Sinopec and China National Offshore, plan to build a string of LNG terminals in coastal areas such as Shanghai, Shandong and Jiangsu, but the current high price of gas is prohibitive.
Xu Dingming, vice-chairman of the nation's leading energy group set up last year, on Friday said that China has its own solutions to secure gas supplies for these LNG terminals, but "would not import an enormous quantity of the fuel if prices remain high." (*)