CNOOC Kicks Off Two LNG Terminals

CNOOC Limited announced that its parent - China National Offshore Oil Corporation and Guangdong LNG partners have selected ALNG ("Australian LNG Partners") as the LNG supplier to Guangdong LNG. The supply contract calls for an initial annual delivery of three million tons of LNG for 25 years.

Meanwhile, CNOOC is engaged in supply discussions with BP to supply a newly inaugurated LNG terminal in Fujian with gas from Indonesian Tangguh gas field. China's second LNG terminal is to be built in Fujian by CNOOC and partners. CNOOC is a 60% equity owner. The project is planned to commence operation in 2006/2007 with an initial annual capacity of 2.5 million tons of LNG.

"The start up of two LNG terminals, not just one as expected, is a great news to China's gas market development. Reliable supply of clean fuels will help boost coastal economies," commented Mr. WEI Liucheng, Chairman and CEO of the Company. "It is also a milestone event for CNOOC Limited, its gas strategy and its expected upstream expansion."

As the result of the LNG supply decisions by the parent and its partners, CNOOC Limited is preparing to firm up the expected acquisition of gas reserves associated with the selected LNG supplying fields. Terms of agreements are expected to be announced later.

"The potential of buying into two upstream assets is a pleasant surprise. It's as much a huge boost to the Company's gas strategy as to our upstream growth strategy, "commented Mr. ZHOU Shouwei, the newly elected President.