China's CNOOC signs LNG deal with GDF Suez

AP News
|
Posted: Oct 09, 2010 6:20 AM
China's CNOOC signs LNG deal with GDF Suez

Chinese offshore oil and gas company CNOOC agreed Saturday to buy 2.6 million tons of liquefied natural gas from French utility GDF Suez SA.

The deal, signed in Shanghai with CNOOC's wholly owned CNOOC Gas and Power Group, calls for France's partially state-owned gas and electric company to provide the LNG over four years, beginning in 2013, executives of GDF Suez told reporters.

GDF said it could not provide a dollar value for the deal, the equivalent of 44 LNG cargoes, at the request of CNOOC. But a similar deal last month to provide 2.5 million tons of LNG to South Korea was reportedly valued at about $1 billion.

The deals come as the huge European gas supplier shifts its attention to Asia to offset relatively slow demand in its main markets in Europe and the United States.

"This new contract strengthens GDF Suez's long-term commitment in China and is a major step in the development of our presence in the energy business in the country," said Gerard Mestrallet, the company's chairman and CEO.

The LNG, from Suez's vast portfolio of natural gas holdings, will be delivered to any of CNOOC's three LNG terminals, said Jean-Marie Dauger, GDF Suez executive vice president.

Fast-growing China has been rushing to clinch access to overseas resources needed to power its booming industries. Gas has been in particularly short supply, with demand far outstripping supply during the winter months.

Using relatively clean LNG in place of coal is also seen as one way to help reduce China's carbon emissions and clear its polluted skies.

"CNOOC is very pleased to sign this medium-term agreement with GDF Suez. This new contract will contribute to energy saving, emission reduction and the development of the low-carbon economy in China," said Wang Jiaxiang, president of CNOOC Gas and Power Group.