'Aussie firm still in running for China LNG contract'

'Aussie firm still in running for China LNG contract'

Dow Jones, Perth

Australia's North West Shelf gas project is still in the race to win a A$600 million a year deal to supply liquefied natural gas (LNG) to China, a person familiar with the bidding process told Dow Jones Newswires Wednesday.

"China is close to saying something and Australia is still in the running," the person said.

The winner of the three million ton a year Guangdong supply contract was originally due to be announced in mid-May.

But a decision could be imminent.

"The delays in announcing the winner has put Australia in a more positive position," the person said. An aggressive Australian lobbying campaign has included a visit to China last month by Prime Minister John Howard.

Earlier this year, state-owned China National Offshore Oil Corp. shortlisted the three bidders to supply LNG to a receiving terminal under construction in Guangdong province in southern China.

The North West Shelf is competing for the contract with two other finalists, Qatar's Ras Laffan Liquefied Natural Gas Co. and BP PLC's Tangguh project in Indonesia.

The North West Shelf is an equal joint venture comprising Woodside, Royal Dutch/Shell Group, Chevrontexaco Corp., BHP Billiton, BP, and Japan Australia LNG, an equal joint venture between Japan's Mitsubishi Corp. and Mitsui & Co..

To meet a late 2005 delivery target for Guangdong, the North West Shelf partners would need to make a final investment decision on whether to build a fifth processing train, or plant, towards the end of this year.

The partners are currently building a A$2.4 billion fourth train, due for completion in 2004, that will meet rising demand from its main Japanese market.