Chinese LNG Project

A Chinese consortium led by the China National Offshore Oil Corp (CNOOC) has signed an agreement with BP Amoco to build a USD 616 million liquefied natural gas (LNG) project. The consortium and BP Amoco will set up an executive office soon to conduct a joint feasibility study, tenders for LNG suppliers as well as shipping arrangements. The partners were expected to set up a joint venture company once the government approved the feasibility study, he said. The company would be responsible for buying and selling the LNG. BP Amoco said last month it would take a 30% equity stake in the project and invest USD 180 million in the first phase, which included a terminal with an annual capacity of three million tons of LNG and a pipeline to supply the southern province of Guangdong. It is expected to start operation by the end of 2005. Other Chinese partners are five Guangdong firms and two Hong Kong utilities, HongKong Electric Holdings Ltd and Hong Kong and China Gas Co Ltd.