Regional LNG: CNOOC's LNG negotiations with Chevron stalled

Negotiations between China's CNOOC and Chevron seem to have reached an impasse, according to a Financial Times report.

An official with CNOOC said, the impasse probably forced the company to seek other LNG suppliers.

Fu Chengyu, the president of CNOOC said that China was a huge potential market, but wont be a high-price LNG market right now.

CNOOC, China's LNG pioneer had signed a 25-year-supply agreement with Chevron, the operator of the Gorgon Gasfield.

The agreement allows for CNOOC to purchase 12.5 per cent shares in the Gorgon project.

But, due to disagreements, further negotiations have stagnated.

It is said that the biggest difference focuses on the price of LNG.

Compared to 2003, the current international LNG price has risen by 300 per cent to 400 per cent.

And not long ago, Chevron signed a 25-year deal to supply Japan's Tokyo Gas Co. with US$6.05 billion worth of LNG, about 1.2 million tons of LNG from the Gorgon field every year.

The company said Tokyo Gas would also consider taking an equity stake in the Gorgon project.(*)