Enter your Email To Join Us For Free Today!

* Sinopec buys 2 mtpa for 20 years from Papua New Guinea

* Delivery to planned Qingdao LNG terminal

* Terminal to have 3 mtpa capacity in first phase

BEIJING, Dec 3 (Reuters) – China’s Sinopec Corp (0386.HK)
has struck its first deal to purchase liquefied natural gas,
agreeing to buy 2 million tonnes per year for 20 years from
ExxonMobil’s (XOM.N) Papua New Guinea project, Sinopec Group
said on Thursday.

The gas will go to a planned LNG terminal at Qingdao in
Shandong province, which will have an annual capacity of 3
million tonnes in its first phase, rising to 5-6 million tonnes
a year in a later second phase, the state-owned parent company,
Sinopec Group, said on its website www.sinopecgroup.com.cn.

It did not give a detailed agenda for the start-up of the
Qingdao LNG terminal or say when the sales would begin.

Sinopec has planned the Qingdao terminal for several years
but it had made little progress as it has not been able to
secure LNG supplies, lagging behind rivals CNOOC (0883.HK) and
PetroChina (0857.HK), which already have three and two
terminals respectively, at various states of development.

Sinopec also plans to build a terminal in the southern city
of Zhuhai but has yet to get a green light from the government.

China is struggling to supply enough gas and suffered
widespread shortages after unexpectedly heavy snows across the
country last month. The shortages prompted the energy companies
to cut supplies to industrial customers to ensure there was
enough to cover residential needs.

China is pushing gas as a relatively clean fuel which will
cause less pollution than coal. As well as building LNG
terminals, it is rushing to increase its own supplies and plans
to import gas via pipelines from Russia, Myanmar and
Turkmenistan.

For a factbox about China’s LNG import deals, please click
[ID:nPEK161692]

ExxonMobil and Sinopec Corp (600028.SS) reached a
preliminary deal on the 2 million tonnes a year of LNG sales at
the beginning of November. [ID:nSYD537366]

ExxonMobil holds 41.5 percent of the shares in the LNG
venture, while Australia’s Oil Search Ltd (OSH.AX) and Santos
Ltd (STO.AX) have 34 percent and 17.7 percent stakes
respectively. Nippon Oil Corp (5001.T) and PNG landowners hold
the remaining shares.
(Reporting by Beijing newsroom; Editing by Tom Miles)
(( This e-mail address is being protected from spambots. You need JavaScript enabled to view it ; +86 10 6627 1200; Reuters
Messaging: This e-mail address is being protected from spambots. You need JavaScript enabled to view it ))
((If you have a query or comment on this story, send an email
to This e-mail address is being protected from spambots. You need JavaScript enabled to view it ))