The key terms agreement is a preliminary agreement between Woodside and CPC. It agrees the key commercial parameters normally included in a sale and purchase agreement, including LNG price. It also facilitates discussions between Woodside and CPC in relation to the potential sale of LNG from Woodside's other proposed Australian LNG developments.
The parties will negotiate in good faith to conclude an LNG supply agreement based on the key terms agreement. Supply from the Browse LNG Development is targeted to commence during the period 2013 to 2015. The agreement is subject to conditions including a final investment decision and the receipt of relevant government approvals.
The Browse Project joint venturers have not been party to the agreement to this point, however the agreement provides the opportunity for commingled sales.
CPC is the dominant player in all sectors of Taiwan’s oil and gas industry. Taiwan is currently the third largest LNG market in the Asia Pacific region behind Japan and South Korea.
Woodside Chief Executive Don Voelte said the agreement recognized the quality of Woodside’s Australian LNG portfolio and emphasized the company’s position as an LNG supplier of choice in the Asia-Pacific region.
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