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Australia’s Gorgon LNG project partners say talks with China’s CNOOC continue

AFX Europe (Focus): Australia’s Gorgon LNG project partners say talks with China’s CNOOC continue

“In October 2003 CNOOC and the Gorgon partners, Chevron, Exxon Mobil Corp and Royal Dutch Shell, signed an agreement that called for the parties to “place a significant volume of Gorgon LNG for use in the growing Chinese market.”

Thursday July 07, 2005

SYDNEY (AFX) – Officials from the Chevron Corp-led Gorgon project, off Australia’s north-west coast, have denied a newspaper report that China National Offshore Oil Company has pulled out of negotiations for a liquefied natural gas (LNG) supply contract.

Gorgon partners spokesman Scott Walker, an employee of Chevron, told XFN-ASIA that “confidential discussions are on-going with CNOOC and have been since 2003.”

Walker said rumors that CNOOC had pulled out could have originated an interview that CNOOC chairman Fu Chengyus gave to The Wall Street Journal on July 6.

Fu told the newspaper that CNOOC had a “memorandum of understanding we have signed with Chevron to participate in the Gorgon LNG project in Australia, which is expected to supply LNG to both China and the US.”

“Of course, sometimes we compete with these companies as well, in this case with Chevron for Unocal.”

Fu was referring to CNOOC’s takeover bid for Unocal Corp in the US.

Walker said the positive relationship is consistent with Fu’s comments and the Gorgon partners “are committed to conclude a sales agreement in the Gorgon gas field.”

A report in the Australian newspaper quoted unnamed Gorgon officials as stating that CNOOC was investigating supplies from other projects around the world as the Gorgon partners were asking too high a price.

The newspaper report said the withdrawal put in doubt a deal worth more than 30 bln aud, a claim the Gorgon partners rejected.

In October 2003 CNOOC and the Gorgon partners, Chevron, Exxon Mobil Corp and Royal Dutch Shell, signed an agreement that called for the parties to “place a significant volume of Gorgon LNG for use in the growing Chinese market.”

Chevron is the project operator with a 50 pct interest, Exxon Mobil has 25 pct and Royal Dutch Shell has 25 pct.

(1 usd = 1.35 aud)

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