Regional LNG: Petronas eyeing Shanghai LNG supply

Decision on whether Malaysian national oil corporation Petronas can supply up to six million tons of liquefied natural gas (LNG) for the Shanghai LNG Terminal project will be known by end of this year, Deputy Prime Minister Datuk Seri Najib Tun Razak said Monday as quoted by Bernama

He said Petronas was still discussing with two Chinese companies, China National Offshore Oil Corporation Limited (CNOOC) and Shenergy Group Limited, on a wide range of issues, including pricing and timeframe of the contract.

Najib declined to speculate on Petronas' chances in bidding for the project.

He said they were other bidders but pointed out that Petronas' advantages were competitive price and secure LNG supply.

The Shanghai LNG Terminal project is jointly developed by CNOOC and Shenergy Group through a joint venture company, Shanghai LNG Company Limited.

According to news reports, the project comprises LNG dock, a receiving terminal and a subsea gas trunk line with a capacity to receive six million tons of LNG per year.

The first phase of the project with a receiving capacity of three millions tons of LNG per year will begin operations in 2008.

Najib said some bidders, for example, in other projects in other countries, were even willing to subsidise the price.

He had raised the Petronas' intention to participate in the project when he met Chinese Premier Wen Jiabao and his counterpart Huang Ju separately in Beijing last Thursday.

He also raised the matter during his discussions with Shanghai Mayor Han Zheng, here Sunday.

Najib said CNOOC and Shenergy made some presentations about the project to him here yesterday, adding that they (CNOOC and Shenergy) would make the final decision on the contract. Shanghai needs the project to fuel its booming economic activities.(*)