Dow Jones reported that China Petroleum & Chemical Corp or Sinopec, will soon sign a long term deal to buy liquefied natural gas from the Exxon Mobil Corp led LNG project in Papua New Guinea.
The official told Dow Jones Newswires declining to be identified that the import of 2 million tonnes a year under the contract will feed a LNG terminal Sinopec is constructing in the eastern Shandong province scheduled to come online in 2014.
Mr Su Shulin chairman of Sinopec said in August that the company was in talks to import LNG from Papua New Guinea. The contract would be a first for the company, which has lagged domestic rivals PetroChina Co and China National Offshore Oil Corp in tying up supply for the series of terminals being built along China's coastline.
In the past three years, China state companies have signed a string of long term LNG deals from producing countries including Qatar, Australia and Malaysia to meet the nation's goal to sharply increase the use of the cleaner burning fuel.
Still, Sinopec delay comes as a boon as natural gas prices are trading sharply lower than the record reached last year in line with the surge in crude oil prices.
Sinopec is also working on building a LNG terminal at the Huangmao Island in Zhuhai to supply the fuel to neighboring Macao. The plan is yet to secure official approval from the central government due at least in part to the lack of a long term gas supply contract.
(Sourced from Dow Jones)
