China might choose Australia for $ 15 bn LNG deal

Aug 05, 1999 02:00 AM

Australia is on the verge of beating rivals from the Middle East and Malaysia to supply China with $ 15 bn of liquid natural gas, according to a senior Chinese official.
China's ambassador to Australia, Zhou Wenzhong, said political stability in Canberra and good relations between the two countries were the basis for an agreement. He highlighted Canberra's support for Beijing in its dispute with Taiwan as a key element, adding that officials from both sides were working to have a deal in place by the time.
Chinese President Jiang Zemin visited Australia. Jiang led a delegation to a trade and investment summit on Chinese business in Melbourne on September 7 before heading to New Zealand for the Asia Pacific Economic Co-operation forum in Auckland on September 12-13.
"We appreciate Australia's view on Taiwan," Zhou said. "This has made it possible to intensify the relationship." His comments followed a visit to China by Foreign Minister Alexander Downer during which he visited state-owned gas buyers in Guandong and Shenzhen.
Zhou said Downer had assured them Australia had the capability to supply vast quantities of gas at a competitive price. "Australia's advantage is its proximity and its political stability," Zhou said. "The two sides are working on a deal by the time of the president's visit."

China is negotiating to buy 3 mm tpy of LNG with discussions centring on a 20-year contract worth up to $ 15.4 bn, the paper said. If it goes ahead it will be the biggest supply contract that Australia has won for any commodity since Japan signed up to buy gas from Australia's North-West Shelf more than a decade ago.
Chris Gunner, president of Australia LNG, the six-company consortium bidding for the contract, said Zhou's words were encouraging and Australia was well placed to beat off the competition.

Source: AFP via Iinoil
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