FINANCIAL TIMES: CNOOC head admits to delays in LNG projects: “The company also said yesterday that there was no longer a timetable for closing a deal with the Australian Gorgon venture - controlled by a consortium of ChevronTexaco, Shell and ExxonMobil - to supply its LNG terminal in Shanghai.” (ShellNews.net) 30 March 05

By Enid Tsui in Hong Kong
Published: March 30 2005

The head of CNOOC, China's main investor in liquefied natural gas (LNG), yesterday admitted to delays in two of the group's key projects.

Fu Cheng-yu, CNOOC's president, said the group's LNG project in Fujian province, a Rmb5.5bn ($664m) investment, was unlikely to start production until 2008, more than a year later than planned.

The setback comes as China moves to diversify its energy sources from a heavy reliance on coal and oil.

CNOOC said that while construction of the regasification terminal was on track, the completed plant would not start production until the first shipment of gas arrived from the Tangguh fields in Indonesia.

BP, Tangguh's main operator, has only just begun construction of the project after protracted negotiations with Indonesian authorities over the development of the vast gas reserves.

The company also said yesterday that there was no longer a timetable for closing a deal with the Australian Gorgon venture - controlled by a consortium of ChevronTexaco, Shell and ExxonMobil - to supply its LNG terminal in Shanghai.

CNOOC had hoped to secure the contract this month. "The reason for the delay is not apparent, but it should have little impact [on the share price] on the company's near-term outlook, since the Shanghai plant is not expected to begin production ahead of the Fujian project," said David Hurd, head of oil and gas research at Deutsche Bank in Hong Kong.

Meanwhile, CNOOC's Hong Kong-listed subsidiary announced full-year results yesterday that were largely in line with expectations. Net profit rose 40.3 per cent to Rmb16.2bn on revenue of Rmb55.2bn.

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