Australia cancels $40.4 billion natural gas contract with China

Australia's Woodside Petroleum yesterday announced that the liquefied natural gas (LNG) sales contract worth 40.4 billion U.S. dollars which the company signed in 2007 with China National Petroleum Corporation (CNPC) has expired. The company had not yet reached a cooperation agreement in the next step with CNPC. The contract was originally the largest trade order that an Australian company had signed with China.

It is understood that in 2007, Woodside Petroleum and CNPC signed a 20-year sales agreement, promising to will sell no more than 3 million tons of liquefied natural gas (LNG) to China every year and Woodside originally planned to start to comply with the contract in 2013.

Sources say that, Woodside and its partner failed to reach agreement on an investment plan to build a project in Western Australia to transport LNG to the Chinese oil company. The investment project was originally planned to be put into operation in mid-2012. If the project was successfully put into operation, several years of preparation would still be needed before Woodside could transport LNG to China.

By People's Daily Online