CNOOC's LNG supply bidding on track despite Chevron MoU: Report

China National Offshore Oil Corp (CNOOC) will proceed with an open bid for LNG supply to its 3 million metric ton per year receiving terminal project in south China despite its subsidiary CNOOC Ltd's natural gas agreement with US oil giant Chevron, a CNOOC Ltd official was quoted by Platts as saying Tuesday.

CNOOC and Chevron Australia Monday signed a memorandum of understanding to explore the possibility of the Chinese offshore producer acquiring a stake in the Gorgon Area offshore Australia and the feasibility of developing the gas market in coastal China.

Gorgon is Australia?s biggest gas field, owned by Chevron, Exxon Mobil Corp., the Royal Dutch/Shell Group and Texaco Inc., located off the coast of western Australia and contains more than 9.6 trillion cubic feet of natural gas

One of the considerations that CNOOC's parent has in picking the right candidate to supply to China's first LNG import receiving terminal in Guangdong province is whether the supplier can offer the Chinese oil group a stake in its overseas gas fields, he said.

When asked if Chevron would be in a better position to clinch the LNG supply contract after inking an MoU with CNOOC Ltd, the official said: "There are many others (oil companies) which are approaching us with offers of an equity share in their gas fields. There's an oversupply of gas globally and developers of gas fields are very keen to sell their output." Meanwhile, China National Offshore Oil Corp will stick with its plan of launching an open bid for LNG supply to its 33 percent-controlled Guangdong LNG import terminal project later this year, he noted.

BP Plc, the sole foreign partner in the US$600 million terminal project with a 30 percent stake, has been widely reported to be interested in offering a stake in Indonesia's Tangguh LNG project to secure the Chinese LNG supply contract.(*)