EXXON, China ink $41b Australian gas deal

Australia and China struck their biggest trade deal ever on Tuesday
as the world's two most valuable listed oil companies, Exxon Mobil
and PetroChina, agreed a $41 billion liquefied natural gas deal.
'It's a statement about the nature of our two economies and the fact
that Australia is important to China, just like China is important
to Australia,' Australian Resources minister Martin Ferguson told
Reuters in Beijing. The gas sale agreement between Exxon and
PetroChina comes just weeks after Exxon inked a A$10 billion Gorgon
LNG sales deal with India's Petronet, which marked Australia's first
ever LNG contract with India. The deals, along with regulatory
approvals process from the federal government now nearing
completion, means that the Gorgon project partners could approve the
massive LNG project, located off Western Australia, by early as next
month. The latest Gorgon gas sale would bring PetroChina's total
LNG purchase from the project to a total of 3.25 million tonnes per
annum (mtpa) for 20 years — making it the largest buyer of gas from
the project. Despite the volumes it is buying, the fact that
PetroChina has not secured a minority stake in the project is an
indication that demand for long-term LNG supplies is still buoyant
despite the current economic downturn. With a long list of around
a dozen proposed LNG projects in the Asia-Pacific region, buyers are
also eager to lock in supplies as quickly as possible from projects
that are most likely to be developed. In the deal signed on
Tuesday, PetroChina will buy 2.25 million tonnes per annum (mtpa) of
gas from the Gorgon LNG project for a period of 20 years, Ferguson
said in a statement. The sale is Australia's most valuable trade
deal ever with China, Australia said, adding that the agreement was a
reflection of the strength of Australia's continuing trade and
investment relationship with China. The massive Gorgon LNG
project, operated by Chevron Corp which owns a 50 per cent stake, is
located off western Australia and has a proposed annual output of 15
mtpa. Exxon and Royal Dutch Shell each own a 25 per cent stake in
the project.