Regional LNG: Australia?s Gorgon proposes supply LNG to Zhejiang, Guangdong: Report

ChevronTexaco Corp., the second- largest U.S. oil company, said its proposed A$11 billion ($8.1 billion) Gorgon liquefied natural gas project in Australia may supply customers in Zhejiang and Guangdong provinces, Bloomberg reported Wednesday.

Details of the Gorgon venture's agreement to sell LNG to China should be resolved this year, Neil Theobald, head of marketing for the project, said from Hangzhou, Zhejiang province, at the end of a trade mission. Theobald and representatives from other Australian LNG projects were accompanying Western Australian State Development Minister Clive Brown.

The Gorgon venture, which includes Royal Dutch/Shell Group and Exxon Mobil Corp., signed a preliminary agreement last year to sell between 80 million and 100 million metric tons of LNG from Gorgon to China over 25 years starting in 2008. The Woodside Petroleum Ltd.-led North West Shelf venture has a A$25 billion agreement to export LNG to the terminal being built in Guangdong.

?All the feedback we got from the various people we met during the minister's visits around China was very positive about the prospects for LNG,? Theobald said. ?It's a strong possibility that some of (Gorgon) gas could go into Zhejiang, and we hope it does -- quite possibly some could go into Guangdong in an expansion of the first phase, or even into some of the other markets.?

Brown's visit included industry and governmental meetings in Guangzhou, Beijing, Shijiazhuang, Shanghai, Hangzhou and Yiwu, the Western Australian government said in a statement on its Web site. Brown and the gas industry representatives met with China National Offshore Oil Co. and other companies and government officials, said Daniel Smith, a spokesman for the minister. Federal Trade Minister Mark Vaile also took part in some of the meetings, he said.

Bill Bloking, BHP Billiton's North West Shelf general manager, Blair Sandison, chief representative, China, of North West Shelf Australia LNG, and Lucio Della Martina, Woodside's general manager of LNG marketing, took part in the talks, Theobald said. The Gorgon venture also opened a representative office in Beijing this week, he said.

China, the largest energy user after the U.S., aims to quadruple its use of natural gas to 8 percent of household fuel by 2010. Zhejiang may be the third LNG import terminal built in China, after Guangdong and one proposed for Fujian. LNG is gas that's been compressed and cooled to liquid form so that it can be loaded onto a ship for transportation to markets that are too far for a pipeline. (*)