Regional LNG: ChevronTexaco sets Gorgon gas for China's Zhejiang: Report
Wednesday, March 31 2004 - 05:32 AM WIB
China's biggest offshore oil and gas producer, CNOOC Ltd, sealed a deal with Zhejiang earlier this month to build the country's third liquefied natural gas (LNG) receival terminal.
CNOOC said it would tender for gas supplies for the three million tonnes-per-year terminal, but might not necessarily source it from the massive Gorgon field off northwest Australia where it already has a framework gas purchase deal worth around $23 billion.
"All the information suggests Gorgon is a leading contender for putting supplies into Zhejiang," ChevronTexaco Global Gas President, John Gass, told reporters.
"It's a very good market. The demand is clearly there...they are keen for LNG into Zhejiang so that's certainly what we are shooting for," he added.
It is expected the terminal would be complete by 2008, when Gorgon gas is due to come on stream.
Under the framework purchase deal signed last October - the largest export deal in Australia's history -- Gorgon will supply up to 100 million tonnes of LNG to China over 25 years.
ChevronTexaco has a 57.1 percent interest in Gorgon, Royal Dutch/Shell Group 28.6 percent and ExxonMobil Corp 14.3 percent.
Gass said the U.S. would be another key market for Gorgon and that ChevronTexaco was looking at two planned offshore LNG import terminals as potential receival points for the super-cooled gas.
He said the company's $650 million offshore LNG terminal in Baja California, Mexico would be built in time to accept Gorgon gas.
"We'd like to have it ready by early-to-mid 2008," he said.
The other potential receival point was ChevronTexaco's $800 million terminal in the U.S. Gulf of Mexico, he said.
LNG has traditionally met about 1 percent of total U.S. gas demand, although analysts forecast it could meet up to 10 percent by the end of the decade.
"We are also considering sites up and down the west coast in the U.S. so we are not just putting all our eggs in the one basket. But the most advanced one is Baja and it's timed to be ready for Gorgon."
The Gorgon venture's first preliminary LNG offtake deals were to the U.S. west coast. Those agreements to sell four million tonnes a year were signed in August with ChevronTexaco and Shell. (*)