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CNOOC ‘struggling’ to find users for Qatar LNG

Beijing, August 19, 2009

State-owned China National Offshore Oil Corporation (CNOOC) has been struggling to find end-users for liquefied natural gas (LNG) to be imported from Qatar because of high import costs, Chinese media said.

The leading LNG importer is scheduled to begin shipping the clean fuel from September under a 2-million-tonnes-per-year (tpy) supply deal.

Most downstream buyers had only signed intention agreements rather than formal contracts with the leading Chinese LNG importer, the official Xinhua news agency reported in a biweekly newsletter.

The LNG, which was priced in accordance with the Japanese Crude Cocktail (JCC), a benchmark for setting LNG prices for Japanese buyers, was estimated to arrive at Chinese terminal Dapeng at around 3 yuan ($0.44) per cubic metre, the report said.

The price would be almost twice as expensive as existing supplies from Australia and would leave minimal margins for city gas distributors that face government-set gas retail prices, and gas-fired power generators facing fixed power tariffs.

CNOOC declined to give details about domestic sales of Qatar LNG, Xinhua said.

Calls to CNOOC were not immediately answered.

Separately, CNOOC and China Merchants Energy Shipping are considering teaming up with Malaysia International Shipping Corp to build a fleet of six LNG carriers to ship the fuel from Malaysia to Shanghai, Xinhua said. – Reuters




Tags: Beijing | Qatar LNG | CNOOC |

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