AUSTRALIA: AUSTRALIA AND IT'S NORTH WEST SHELF CONSORTIUM, WINS 11-14 BILLION US DOLLAR CONTRACT TO SUPPLY LIQUEFIED NATURAL GAS TO CHINA

Record ID: 640502

  • Title: AUSTRALIA: AUSTRALIA AND IT'S NORTH WEST SHELF CONSORTIUM, WINS 11-14 BILLION US DOLLAR CONTRACT TO SUPPLY LIQUEFIED NATURAL GAS TO CHINA
  • Date: 8th August 2002
  • Summary: (W4) SYDNEY, AUSTRALIA (AUGUST 8, 2002) (REUTERS) WIDE OF AUSTRALIAN PRIME MINISTER JOHN HOWARD ADDRESSING NEWS CONFERENCE WIDE OF JOURNALISTS SCU SOUNDBITE (English) JOHN HOWARD SAYING: "The Australian consortium, the North West Shelf consortium, has won the bid to supply natural gas to the Guangdong province in China. It is a contract that will stretch over a period of twenty five years. It is worth between twenty and twenty five billion dollars in export income to Australia and I'm told it represents the largest single order ever won in Australia." SMV JOURNALISTS/ CAMERA CREWS SCU SOUNDBITE (English) JOHN HOWARD SAYING: "I've been advised of this outcome in a letter from the Chinese Premier Zhu Rongji. Needless to say I am absolutely delighted, it is so good for Australia. This is the kind of outcome that will underpin the economic strength of this country especially in the Asian Pacific region for the years into the future. This is long-term export value for Australia. This demonstrates the great competitive capacity of this country when companies and government work together." SMV ARTHUR DIXON, PRESIDENT OF WOODSIDE PETROLEUM, WITH HOWARD SCU SOUNDBITE (English) ARTHUR DIXON SAYING: "There is a discussion that's gone on between CNOOC (CHINA NATIONAL OFFSHORE OIL CORP) and the North West Shelf partners and the gate is open for CNOOC to come in as an equity partner in the North West Shelf but that will be the subject of further discussions." SLV HOWARD AND DIXON LEAVING PRESS CONFERENCE
  • Embargoed: 23rd August 2002 13:00
  • Keywords:
  • Location: SYDNEY, AUSTRALIA / AT SEA
  • Country: Australia
  • Topics: Business,Politics,Energy
  • Reuters ID: LVAPKHURG25UKNTF8GOJO7R97DG
  • Story Text: Australia has won an A$20 - A$25 billion (11-14 billion U.S. dollar) contract to supply liquefied natural gas to China. Australia's North West Shelf venture has been chosen by China to be the sole supplier of gas to its first LNG project in Guangdong province.
    Australian Prime Minister John Howard said on Thursday (August 8) it was Australia's largest single export deal.
    "The Australian consortium, the North West Shelf consortium has won the bid to supply natural gas to the Guangdong province in China. It is a contract that will stretch over a period of twenty five years. It is worth between twenty and twenty five billion Australian dollars in export income to Australia and I'm told it represents the largest single order ever won in Australia," he told a news conference.
    The surprise win by Australia to supply $500 million Australian dollars a year in gas to China from 2006 would lead to further development of the giant North West Shelf project and help secure its long-term future.
    Shares in North West Shelf operator and one-sixth stakeholder Woodside Petroleum Ltd soared as much as eight percent on news of the contract -- Australia's largest single export deal.
    China National Offshore Oil Corp (CNOOC), China's largest offshore oil producer, said Australia had won the keenly contested bid to supply three million tonnes of liquefied natural gas (LNG) a year over 25 years to China's first LNG terminal.
    Investors had heavily tipped BP Plc in Indonesia to win the contract over the Australian consortium and Qatar's Ras Laffan Liquefied Natural Gas Company, a joint venture of state-run Qatar Petroleum and ExxonMobil.
    Other equal one-sixth partners in the North West Shelf are local arms of BP Plc, ChevronTexaco, Royal Dutch/Shell RD.AS> SHEL.L>, and Japan Australia LNG (MIMI) Pty Ltd.
    The gas supply contract would underpin the A$1 billion construction of a fifth production train, which processes the natural gas into a liquid for use.
    A fourth 4.2 million tonne production train and second trunkline to bring gas onshore were already under construction.
    As part of the deal, a new joint venture known as China LNG would be formed with rights to four million tonnes of North West Shelf gas a year for 25 years.
    CNOOC would take a 25 percent equity stake in the venture, with the rest split between exiting North West Shelf partners.
    Howard said the gas supply contract could earn the country up to A$25 billion (14 billion U.S. dollars) in export income.
    Analysts estimated the Guangdong supply deal was worth between A$0.50 (26 U.S. cents) and A$1 (52 U.S. cents) a share for Woodside and A$0.05 a share for BHP Billiton.
    The contract gave the North West Shelf the opportunity to snare even more of the expanding Chinese gas market.
    The 616 million U.S. dollar Guangdong terminal is led by CNOOC, parent of Hong Kong listed CNOOC Ltd, with BP holding a 30 percent stake.
    The North West Shelf currently supplies 70 percent of Western Australia's domestic gas demand and about 10 percent of Japanese LNG demand from three production trains.
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