18 August 2009

ExxonMobil, China make multibillion-dollar deal

PetroChina Co. signed a liquefied natural gas import deal with ExxonMobil Corp. worth an estimated $41.03 billion (A$50 billion) over the next 20 years.

Australian Energy and Resources Minister Martin Ferguson announced the deal.

The LNG supplied to PetroChina will come from Exxon’s 25% share of the huge Gorgon gas field offshore of Australia.

Dow Jones Newswires reported Exxon would supply 2.25 million metric tons of LNG a year to PetroChina from Gorgon under the long-term deal, Ferguson said.

Worried by a reliance on crude oil imports and pollution from burning coal, China is seeking to raise the share of cleaner-burning natural gas in its energy mix. LNG is natural gas cooled to liquid form so it can move by ship.

The binding agreement with Exxon is the third struck by PetroChina for LNG imports from Australia since September 2007 and marks Australia’s biggest trade deal ever, according to Ferguson.

“PetroChina is an increasingly important partner in the Australian LNG industry, and I hope the relationship will be long and successful,” he said.

The deal comes at a time of frenetic activity in China’s state energy and mining companies’ pursuit of greater access to Australian resources.

The Gorgon field, which has potential reserves of more than 40 trillion cubic feet of gas, is located off the coast of Western Australia, and Exxon, Chevron Corp., and Royal Dutch Shell PLC are developing it.

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