CNOOC and BP Undertake LNG Terminal Study

CNOOC and BP will complete a feasibility study for China's first liquefied natural gas (LNG) project by June, 2002. An agreement for the supply of gas is also expected to be sealed in a similar timeframe. CNOOC and BP plan to build a three million tonne per year (tpy) LNG import terminal in southern Chinese province of Guangdong by the end of 2005.

The Guangdong LNG Joint Executive Office, a joint management team based in the city of Shekou, is preparing bidding documents for potential gas suppliers. Although it is not sure when the bid documents will be issued. All bid documents are subject to approval by the State Development Planning Commission.

Companies vying for the gas supply contract include Royal Dutch/Shell, a partner in Australia's Northwest Shelf and Russia's Shakhalin gas projects, and BP which has a stake in Indonesia's Tangguh LNG project along with national oil companies in Malaysia and Oman. In April, BP took a 30 percent equity stake in the $616-million project, which includes the LNG terminal and a 215-km pipeline. CNOOC, the parent of CNOOC Ltd , is the leading shareholder with 33 per cent equity. Chinese partners in the CNOOC consortium are five Guangdong companies and Hong Kong utilities, Hongkong Electric Holdings Ltd and Hong Kong and China Gas Co Ltd.