Shell signs 20-year LPG supply deal with PetroChina

25 November 2008

Royal Dutch Shell Plc, Europe's largest oil company, has agreed to sell two million tonnes of liquefied natural gas (LNG) annually to PetroChina under a 20-year contract, Chinese state media reported today.

The agreement was signed between Royal Dutch Shell Plc and PetroChina International Co, a wholly-owned subsidiary of PetroChina Company Limited, China's largest oil and gas producer.

The supplies would also come partly from the proposed Gorgon gas project off the coast of Western Australia, in which Shell has a 25 per cent stake, the Shanghai Securities News said, citing Shell sources.

The Australian North West Shelf project also supplies 3.3 million tonnes of LNG annually to China's Guangdong LNG terminal, operated by the country's largest offshore oil and gas producer - China National Offshore Oil Corp (CNOOC).

Shell had, in September last year, signed an agreement to supply one million tonnes of liquefied natural gas to PetroChina over twenty years. The final LNG quantity stands doubled now, the report said.

PetroChina had, in April, signed an agreement with Qatargas and Shell under which the Chinese firm would buy three million tonnes of Qatari LNG per year for 25 years.