The agreement calls for the parties to place a significant volume of Gorgon LNG for use in the growing Chinese market.
Subject to the completion of formal contracts, CNOOC Limited will purchase a certain equity stake in the Gorgon gas development and its parent, China National Offshore Oil Corporation ("CNOOC") will arrange to purchase certain volume of LNG directly from Gorgon.
Mr. Ma Kai, Minister in charge of the State Development and Reform Commission, Mr. Zhou Wenzhong, Vice Minister of Foreign Affairs, P. R. China attended the signing ceremony of the agreement.
CNOOC is already involved in two LNG receiving terminal projects in China, in Guangdong and Fujian. The second phases of Guangdong and Fujian LNG projects, Zhejiang and other coastal provinces may potentially be new locations identified for the expanding LNG trade in China.
The newly appointed Chairman and CEO of CNOOC Limited, Mr. Fu Chengyu, accompanying the Chinese President on his visit to Australia, said, "We look forward to becoming an active and constructive player in the Australian hydrocarbon business as a Gorgon participant."
"This potential investment in the Gorgon Project will further strength our natural gas strategy and dominant position in supplying the growing natural gas markets in coastal China," he added.
The Gorgon Joint Venture participants consist of ChevronTexaco (4/7th interest and operator), Shell (2/7th) and ExxonMobil (1/7th).
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