LONDON [MENL] -- Iran has advanced in negotiations to sell up to $20 billion worth of liquefied natural gas to China.
In what could be the largest Iranian energy deal since 1996, Teheran has agreed in principle to sell $20 billion worth of LNG to China over the next 25 years. The two countries -- ignoring U.S. energy sanctions on Teheran -- have signed a memorandum of understanding that envisions the start of LNG supplies in 2008.
Under the proposed arrangement, the Beijing-based Zhuhai Zhenrong Corp., a spinoff of China's defense and missile contractor, China North Industries Corp., would begin importing an annual 2.5 million metric tons of Iranian LNG. That figure would increase to five million tons annually. China North Industries, also known as Norinco, has been the target of U.S. sanctions amid missile sales to Iran.
China, which imported 12.4 million tons of crude oil in 2003, has become a major energy client of Iran and plans to develop Iranian energy fields. In April, a Zhenrong unit, Tianbao Energy, will renew a contract to buy 80,000 tons of fuel oil a month from the state-owned National Iranian Oil Co. That contract will last through March 2005.
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http://www.menewsline.com/stories/2004/march/03_21_1.html
China must be anticipating either using a lot of LNG or they are reducing their dependancy on oil dramatically. They've just recently signed a $30billion contract with Australia for LNG as well.
What will be interesting is if they are war storaging and/or converting their military fleet to LNG as well.
In what could be the largest Iranian energy deal since 1996, Teheran has agreed in principle to sell $20 billion worth of LNG to China over the next 25 years. The two countries -- ignoring U.S. energy sanctions on Teheran -- have signed a memorandum of understanding that envisions the start of LNG supplies in 2008.
Under the proposed arrangement, the Beijing-based Zhuhai Zhenrong Corp., a spinoff of China's defense and missile contractor, China North Industries Corp., would begin importing an annual 2.5 million metric tons of Iranian LNG. That figure would increase to five million tons annually. China North Industries, also known as Norinco, has been the target of U.S. sanctions amid missile sales to Iran.
China, which imported 12.4 million tons of crude oil in 2003, has become a major energy client of Iran and plans to develop Iranian energy fields. In April, a Zhenrong unit, Tianbao Energy, will renew a contract to buy 80,000 tons of fuel oil a month from the state-owned National Iranian Oil Co. That contract will last through March 2005.
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http://www.menewsline.com/stories/2004/march/03_21_1.html
China must be anticipating either using a lot of LNG or they are reducing their dependancy on oil dramatically. They've just recently signed a $30billion contract with Australia for LNG as well.
What will be interesting is if they are war storaging and/or converting their military fleet to LNG as well.