China unveils standards for LNG suppliers : Report

The Joint Executive Office for southern China?s Guangdong liquefied natural gas project has submitted to the Chinese government suggested standards for choosing LNG suppliers, a China-based industry executive quoted by Dow Jones as saying.

The JEO, consisting of China National Offshore Oil Corp and BP Plc, will start tendering for the supply of 3 million metric tons of LNG for delivery beginning 2005 soon after it receives approval from the government, said CNOOC official, without giving a date but adding that the contract will be tendered before the end of this year.

A CNOOC official said earlier that the choice of a supplier would be based on the resources of the host country, stability of production, experience in long-term supply and political stability.

Industry sources said the contracts are likely to go to more than one supplier to ensure a stable supply.

CNOOC also has indicated interest in acquiring stakes in natural gas reserves in countries seeking to supply LNG to China, including Indonesia, Australia, Qatar, Brunei and Malaysia.

The JEO also is considering inviting a foreign company to lead the feasibility study for the LNG receiving terminal slated for construction in Guangdong in 2002.

However, he said the feasibility study for the LNG pipeline likely will be given to a Chinese company.

CNOOC and other Chinese investors in the US$600 milllion project will establish a joint venture company with BP in 2002 following the completion of the feasibility study.

CNOOC has a 33 percent stake in the project, BP 30 percent, with the remainder held by Guangdong and Hong Kong investors. (*)