PetroChina Signs US$41 Billion Gas Deal with ExxonMobil

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Aug. 19 – China’s PetroChina has made its largest trade yet with a US$41 billion liquefied natural gas deal with American company ExxonMobil.

Under the deal, PetroChina will buy 2.25 million tons per year of gas from the Gorgon LNG project located in Western Australia for 20 years thus becoming the largest buyer in the project.

This is also Australia’s biggest trade deal with China so far. “It’s a statement about the nature of our two economies and the fact that Australia is important to China, just like China is important to Australia,” Australian Resources Minister Martin Ferguson told Reuters in Beijing.

The agreement is expected to be approved by authorities next month. The Gorgon LNG project is managed by Chevron, which also owns a 50 percent stake, while ExxonMobil and Royal Dutch Shell each have a 25 percent stake.

The project will develop the Greater Gorgon gas fields in the Carnarvon Basin located about 130 kilometers off Western Australia. China has been on a buying mission to secure future gas supplies from developing projects from as far as Africa to Central Asia.

The latest deal with PetroChina may also indicate that trade relations are improving between Australia and China. Recently, relations were strained when Rio Tinto rejected  a huge Chinalco bid and China initially detained four Rio Tinto employees in Shanghai on charges of espionage.