China LNG I: Guangdong

Woodside has learnt through diplomatic channels that its North West Shelf joint venture has won the contract to supply a new LNG receiving terminal in China’s Guangdong province. The 25-year contract involves the supply of 3 million metric tons of LNG a year starting in 2005–6, subject to the finalisation of commercial terms and final approval by the Chinese government. The fifth train, or processing unit, will cost more than ASD 1 billion and will take over three years to build, Woodside said. Also under the deal, the North West Shelf and Chinese shipping companies Cosco Shipping Co. and China Merchants, will establish a joint venture to support the transportation of LNG to Guangdong. Woodside said two to three ships will be needed to service the China trade route. The North West Shelf is in the process of constructing a fourth processing train at the site. Completion of both the fourth and fifth trains will more than double the Shelf’s LNG processing capacity of 7.5 million tons a year. China’s CNOOC controls the Guangdong project. The North West Shelf is an equal joint venture comprising Woodside, the Royal Dutch/Shell Group, ChevronTexaco Corp., BHP Billiton, BP, and Japan Australia LNG, itself an equal joint venture between Japan’s Mitsubishi Corp. and Mitsui & Co.

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