Regional LNG: CNOOC, Petronas in LNG deal: Report

China's top economic planning agency, the National Development and Reform Commission (NDRC), is considering approving a 25-year supply agreement for liquefied natural gas (LNG) with Malaysia's Petronas, Xinhua news agency said.

A framework agreement for Petronas to supply LNG to a Shanghai terminal had been reached, but a final deal can only be realized after a price for the gas is agreed upon, Xinhua reported.

The NDRC is currently considering approving the contract, but the final price will be a key factor, it said.

The Shanghai terminal, currently under construction, is being built in two phases with the first scheduled to go into operation in 2008 with capacity to process 3 mln tons of LNG annually, the report said.

Phase two of the project will increase capacity to six mln tons.

The Shenergy Group holds a 55-pct stake in the project, while China National Overseas Oil Corp (CNOOC) holds the other 45 pct.

An acceptable price range is 5-6 usd per MMBTU of LNG, the report said.(*)