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CNOOC clinches supply deal for liquefied natural gas

By Hu Meidong and Wang Xu (China Daily)
Updated: 2006-09-21 08:55

China National Offshore Oil Corp (CNOOC), the nation's biggest offshore oil producer, finalized a deal yesterday to buy liquefied natural gas (LNG) from the Indonesian Tangguh gas project for its LNG terminal in East China's Fujian Province.

The Tangguh project, under the operation of BP Plc, is set to supply 2.6 million tons of LNG annually for 25 years to the Fujian terminal starting from 2009. The value of the deal was not revealed.

The new deal will allow CNOOC to supply LNG to gas power stations and urban customers in five cites in Fujian Province, which will help meet the rising energy demand in the area.

"The deal is Indonesia's first long-term LNG supply project for China, which has far-reaching significance for both countries," said Eddy Purwanto, deputy head of finance, economy and marketing of BP MIGAS, an Indonesian government body supervising oil and gas production in the Southeast Asian nation.

The Tangguh project, located in Papua of Indonesia, is scheduled to come on stream by late 2008, drawing its gas supplies from six fields in the Bintuni area.

CNOOC is the first company to sign a supply and purchase agreement with the project, which will speed up construction of the third LNG project in Indonesia.

"The deal has received active support from both countries, and CNOOC is also looking at future opportunities to expand its oil and liquefied gas supply," said Wu Zhenfang, CNOOC's vice-president.