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Amaunet

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Amaunet

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Friday, 03/19/2004 10:50:46 PM

Friday, March 19, 2004 10:50:46 PM

Post# of 9338
China signs $20 billion LNG deal with Iran
Transaction will be one of world's largest if finalized

This is huge, if finalized whoever attacks Iran attacks China. -Am


Compiled by Daily Star staff

SINGAPORE: A Chinese state oil trader said Thursday it had inked a preliminary deal to import more than 110 million tons of liquefied natural gas (LNG) over 25 years from Iran for $20 billion as China grows thirsty for energy.
The deal would mark one of the world's largest LNG purchase deals if a final agreement is signed.
"This is only a memorandum of understanding," said a spokeswoman for Zhuhai Zhenrong by telephone from Beijing. "We have yet to negotiate for an upstream stake (in Iran) and secure gas off-takers in China."
She said Zhenrong signed the memorandum with the National Iranian Gas Exporting Company in Beijing on March 3 and would issue a more detailed announcement in the second half of this year.
Zhenrong said in a statement it signed the framework agreement to buy 2.5 million tons of the super-cooled, compressed natural gas per year from Iran starting in 2008, rising to 5 million tons a year from 2013.
Iran sits on the world's second-biggest gas reserves after Russia, but has lagged its neighbor Qatar in developing its resources. Its South Pars gas field alone, which is geologically related to Qatar's 380 North Field, contains an estimated 250 trillion cubic feet of natural gas.
Divided into 25 development phases, South Pars is Iran's largest investment project and is being used to jumpstart a market in natural gas exports in the form of LNG. Gas from South Pars will also be used for re-injection purposes.
The Islamic Republic clinched its first LNG deal last month as it announced a $2 billion venture with France's Total and Malaysia's Petronas to start producing 8 million tons of LNG per year by 2009.
China, the world's second-largest oil consumer and a net importer, is spending billions of dollars on pipelines and LNG ports to boost natural gas to 8 percent of its energy mix by 2010, from less than 3 percent now.
Chinese state oil firms are under pressure to secure foreign oil and gas assets to fuel the world's fastest-growing major economy as domestic oil and gas output decline.
Earlier this month, China announced plans to build a 3 million ton-per-year LNG receiving terminal, its third, and a 2,800-megawatt power plant in the eastern port city of Ningbo for a total of $1.7 billion. More terminals are being planned along China's eastern coast.
Zhenrong, one of China's four major state oil traders, said it had also signed an MOU with the Iranian Oil Ministry to undertake development and production in three Iranian oil fields as part of the LNG purchasing plans. It did not identify the oil fields.
Each of the fields in OPEC-member Iran - the second-largest oil exporter to China after Saudi Arabia - has a 15-million-ton average annual production capacity, the official China Daily reported Thursday. - Reuters

http://www.dailystar.com.lb/business/19_03_04_g.asp


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