CNOOC taps new LNG projects
CNOOC taps new LNG projects
SINGAPORE (Reuters): China's leading offshore oil and gas producer CNOOC is tapping opportunities to build China's second and third liquefied natural gas (LNG) terminal after piloting the first one, Chinese industry sources said on Friday.
CNOOC, parent of CNOOC Ltd, is in talks with local governments in eastern coastal provinces of Fujian and Shandong to study the possibilities of building LNG receiving terminals.
"CNOOC and local authorities of Fujian and Shandong have been in discussions for a while. Some letter of intent is expected to be signed," a senior industry source close to the talks told Reuters from Beijing, but declined to say when.
The official did not comment on the terminal capacity and the time frame for constructions.
Designated by the central government, the offshore player is the leading stake holder in China's first LNG project due onstream by end 2005 in the southern province of Guangdong.
CNOOC holds a 33 percent stake of the three million ton per year terminal costing $616 million, while oil major BP holds 30 percent.
Fujian and Shangdong have been picked as the sites for the potential receiving terminals as both have little or no gas access.
"Imported natural gas will be the only gas supply for Fujian and Shangdong as both won't have enough supplies even though it's close to CNOOC's production in nearby Bohai Bay," the source said.
He said CNOOC would push forward the new projects more aggressively than the one in Guangdong, which has been dogged by slow decision-making due to the many Chinese participants involved.
"The Guangdong project has nine Chinese equity holders. CNOOC will continue to be the leading partner in the new plans, but not with so many participants this time," the official said.
Chinese partners in the CNOOC-led Chinese consortium for the Guangdong terminal are five Guangdong companies and three Hong Kong firms.
China's booming east coast, which includes provinces of Shangdong, Jiangsu, Zhejiang, Fujian, Guangdong and the city of Shanghai, are seen as the biggest gas-consuming areas in the following decade.
Targeting the market are the country's massive 4,200-kilometer onshore gas pipeline from northwest Xinjiang to Shanghai, the gas development in the East China Sea and the imported LNG, industry sources said.