Regional LNG: CNOOC to offer higher price for Gorgon LNG: Report

China National Offshore Oil Corporation (CNOOC) has not broken off negotiations with Chevron for LNG from Gorgon and could seek more than 2.7 million tons of LNG annually from the site for a price higher than previous paid for LNG, Wu Zhenfang, Vice President of CNOOC Wu Zhenfang told reporters in Beijing on Monday in response to a question from Interfax.

"The demand is there, and I think annual LNG purchases from Gorgon could exceed 2.7 million tons," said Wu. "We will take as much as they can produce."

Wu made his comments on the sidelines of the China Gas Summit 2005 in Beijing.

"The price for Gorgon LNG will be higher than [the price for LNG going to] Guangdong and Fujian because we must meet the demands of the market," said Wu.

However, the final price and exact amount of LNG from Gorgon remains subject to negotiations with Chevron.

Wu also indicated CNOOC was pursuing LNG from other sources, but declined to list the companies and countries the company was in negotiations with.

Wu strongly denied allegations that negotiations with Chevron for LNG from Gorgon had been terminated.

"I haven't heard of this, and can't believe it could happen," said Wu.

"We still have very good cooperation with Gorgon, are continuing negotiations, and expect very good results."

The Gorgon natural gas field is the largest to have been discovered in Australia with reserves of 9.6 trillion cu feet.

On October 27, Chevron announced it had signed a Head of Agreement with Tokyo Gas Corporation regarding the purchase of 1.2 million tons per annum of Gorgon LNG over a 25-year period beginning in 2010. (*)