CNOOC's Australia gas pact hinges on LNG supply bid: Report
Wednesday, January 30 2002 - 08:38 AM WIB
He said CNOOC might pull out of the agreement if Australia, represented by Australia LNG Pty Ltd., or ALNG, fails to win a bid to supply 3 million metric tons of LNG, or part of it, to China by 2005.
A consortium led by CNOOC has shortlisted Australia, Indonesia and Qatar for final negotiations for the LNG supply contracts.
The three countries are represented by Australia LNG Pty. Ltd., BP Gas Marketing Ltd. for Indonesia and Ras Laffan Liquefied Natural Gas Co. for Qatar.
"China won't produce gas outside the country without considering shipping it home for its consumption," the industry official said.
He said politics and the LNG sales price are the key success factors for winning the supply contacts.
The government might intervene during the last stage of negotiations, putting pressure on CNOOC to offer the deal to the country among the three that China enjoys the best relations with, he said.
Two weeks ago, CNOOC Ltd. acquired five assets in Indonesia, all of which are in operation and have proved reserves of 360 million barrels of oil equivalent, illustrating the improvement in bilateral relations between China and Indonesia.
He said China may split the supply into two contracts, but this option will create pricing disadvantages to CNOOC as opposed to a single supply contract.
"China will have a good bargaining point for low prices if it buys 3 million tons a year from a single supplier," he said.
CNOOC couldn't be reached for comment.
Earlier, however, an ALNG official told Dow Jones Newswires that the joint venture and China LNG supply bid are separate issues.
But CNOOC Chairman Wei Liucheng has said his company has long expressed its desire to secure upstream assets for LNG imports and is looking forward to similar agreements with potential suppliers. (*)