Sorry MGC I had to grab this from your mermaid post I think this...

Sorry MGC I had to grab this from your mermaid post I think this needs to be over here as well.

www.chinaview.cn 2010-01-06 11:14:10 Print

BEIJING, Jan. 6 -- An Australian natural gas company announced Monday the end of a 40.4 billion U.S. dollars agreement with PetroChina, provoking strong reactions in China, which is increasingly grappling with gas shortages.

The agreement with PetroChina, signed in 2007, expired on December 31. The company has not reached any further agreement with China's largest gas supplier, Australian natural gas company Woodside said in a statement, without elaborating.

According to the 2007 non-binding agreement, Woodside would potentially supply 2 to 3 million tons a year of liquefied natural gas (LNG) from its Browse Basin Develop ment to PetroChina over 20 years. At the time, the agreement was hailed as Australia's largest export deal, worth an estimated AU$45 billion (40.4 billion U.S. dollars).

PetroChina declined to comment Tuesday, leading to speculation on the motive.

Watoday, an Australian daily, suggested that a delay in the Browse Basin development in Western Australia had caused PetroChina to abandon the potential deal of buying up to 60 million tons of gas.

"In 2007, when the deal was signed, supply from Browse was expected to begin from 2013 and 2015," a Woodside spokeswoman told Watoday on Monday. "That timing is no longer realistic for Browse, (with a potential) final investment decision in 2012."

Yvonne Ball, a Woodside spokesperson, declined to confirm the speculation, saying the company would keep PetroChina informed of progress in its LNG export projects.

Woodside's November 2007 agreement with CPC Corporation Taiwan to supply 2-3 million tons of gas a year over 20 years remains in place.

Japan's Osaka Gas has also agreed to buy up to 1.5 million tons of LNG a year from Browse.

China has suffered severe shortages of gas since last November, which are expected to grow to 30 billion cubic meters next year and could reach 40 billion in 2015, the China News Agency reported.

Gas shortages have become more acute recently due to heavy snowfalls and a cold snap hitting northern China.

PetroChina said on Monday it has purchased 65,000 tons of gas at the current market price to cope with the new peak in demand, incurring more than 60 million yuan ($8.8million) in losses, Shanghai Securities News reported.

Despite the ambiguity about which party is determined not to renew the agreement, some Chinese experts say the termination is a big loss to China.

"From the energy-security perspective, China could suffer a great loss from the discontinued deal, as it was struck in 2007 when the cost of gas was lower than the current level," Xu Xiaojie, a researcher at the Institute of World Economics and Politics at the China Academy of Social Sciences, said.

According to Xu, China produces around 70-80 billion tons of LNG a year, insufficient to meet domestic demand of at least 100-120 billion tons this year.

Zhou Shijian, a senior researcher with the Institute of Sino-US Relations at Tsinghua University, said China's quest for gas and other energy sources from abroad has been tricky.

"Gas and oil resources that are easily exploited have been grabbed by Western countries, which left only crumbs for China," he said.

When China seeks energy cooperation with countries like Sudan and Iran, it always faces pressure from the West, and China's intention to cooperate with Western countries also arouses suspicion from their Western counterparts, Zhou said.

Xu said that Chinese companies lack experience in purchasing energy from abroad, with both "success and defeat" in overseas energy cooperation in recent years.

In 2002, China National Petroleum Corp (CNPC), the parent company of PetroChina, lost to its Russian rivals Sibneft and TNK-BP in a bid for stocks sold by Slavneft due to interference by the Russian government, reluctant to allow China to hold stakes in its large oil and gas companies.

However, Liu Yijun, a professor of energy economy at China University of Petroleum, told the Global Times that the deal's end won't have a major impact on China's natural gas imports and use.

"The two countries only reached an initial agreement the deal's lapse is common business practice. There is no need for speculation and worry," he said, adding that an annual import volume of up to three million tons is only a minor part of China's natural gas demand of more than 100 billion tons per year.

China has long sought to secure natural gas from multiple sources instead of any one country. PetroChina and Russia's Gazprom Export recently agreed the basic terms of Russian natural gas supplies to China.

A massive 1,833-kilometer natural gas pipeline that connects Turkmenistan, Uzbekistan and Kazakhstan opened last month, with experts optimistic about its role in filling the natural-gas gap.

Gas-rich Qatar has been diverting part of its supplies from the US market to China, and expects China to be one of its biggest consumers, according to a report by the Financial Times in October.

Liu added there is a possible reason for the termination of the contract, as the Australia-based company adjusts its investment strategies and hopes that China could make changes to the contract.

Relations between Australia and China were strained in July when four employees of mining giant Rio Tinto were detained in Shanghai on suspicion of espionage and stealing state secrets.

(Source: Global Times)



Australian $90 billion gas megadeal with Japan
By Felicity Williams From: Herald Sun January 07, 2010 AUSTRALIA has cemented its biggest trade deal with a $90 billion agreement to export liquefied natural gas to Japan.

The contract, signed on the eve of the international climate change conference in Copenhagen, comes as big Asian countries scramble to lock up long-term supplies of the low-emissions fuel.

US oil giant Chevron announced on the weekend it would deliver 4.1 million tonnes of LNG from its Wheatstone project off the coast of Western Australia to Japan's largest utility, Tokyo Electric Power Co, each year for up to 20 years.

The two parties did not disclose the value of the sales agreement, but energy experts estimate the deal to be worth a record-breaking $90 billion.

That tops the nation's previous biggest export agreement, ExxonMobil's $50 billion contract to supply LNG to China from the massive Gorgon field, also in WA, unveiled in August. About $127 billion in Australian LNG projects are expected to start exports between 2012 and 2018.

Resources and Energy Minister Martin Ferguson has predicted the investments will transform Australia into an "energy superpower".