No agreement yet on Tangguh LNG price: CNOOC

China'a number-three oil company, CNOOC Group, denied on Wednesday that it had agreed on a new price for the Tangguh LNG, saying it was still in talks with Indonesia on the price and expected an agreement in late July.

The head of Indonesian oil and gas watchdog BPMIGAS, Kardaya Warnika, said earlier this month Indonesia had agreed to raise the price of LNG from the BP-led Tangguh project, which would be sold to CNOOC, to an oil-equivalent price of US$38 a barrel versus the previous $25 level.

But CNOOC Presdient Fu Chengyu said in talks between the company and Indonesia had not been finalised.

"We haven't made a decision. We expect to reach an agreement by the end of July," Fu told Reuters on the sidelines of the opening ceremony of the country's maiden LNG terminal near Shenzhen, which was officiated by Chinese Premier Wen Jiabao and Australian Prime Minister John Howard.

When asked whether the new pricing would be roughly $10 per million British thermal units (MMBTU), Fu said: "We definitely won't agree the long-term price at $10."

But Fu, who is also the chairman of Hong Kong-listed CNOOC Ltd. , said the final pricing could fall between $5 MMBTU and $10 MMBTU.

State-owned CNOOC is leading the race to build LNG-receiving terminals in China as Beijing seeks to curb pollution by promoting the use of the environmentally friendly gas.

The progress on sourcing gas supplies has slowed in the past few years on concerns about gas prices.

So far, China has finalised just one LNG import deal, a contract with Australia's North West Shelf to supply Guangdong Datang LNG Co. Ltd., which is controlled by CNOOC Group and indirectly invested in by BP Plc., near Shenzhen.

The Indonesian LNG supply deal would be the second and would supply the country's second receiving terminal in the south-eastern province of Fujian, also run by CNOOC.

Fu said initial pricing of the Fujian project was made at a time when the oil price was at $25 per barrel and not current prices of around $70.

He also said it was possible that there would be more LNG deals with Australia. "We would like to expand our investment in Australia, and to bring in more LNG." (*)