CNOOC faces rivals in LNG imports

China's two oil majors, Sinopec and Petro China, were reported by South China Morning Post to he
interested in building terminals for importing liquefied natural gas (LNG), threatening to
rival CNOOC (China National Offshore Oil Corporation) which has dominated the market
so far. Chen Tong-hai, president of Sinopec's parent, China Petrochemical, led a
delegation in June to visit oil and gas projects off Salthalin on Russia's eastern seaboard.
After the visit, the governor of Sakhalin was reported as saying that Sinopee planned to
build an LNG -receiving terminal with an annual capacity of 3m tonnes and that Sakhalin
might become a supplier. Sinopee officials declined to comment on the plan.
CNOOC has said that it would also consider building an LNG terminal in Shanghai if demand
proved to he higher than the 'capacity of the west-to-east gas pipeline currently being built.
The second phase of the pipeline is due to be completed in 2007.
Meanwhile CNOOC is still actively looking for overseas acquisitions, despite being blocked from buying a share
in the North Caspian field in Kazaldistan. CNOOC and Sinopee have stepped up talks with
foreign companies about participation in their joint venture Xihu Trough gas field project.
Contracts were expected to be signed soon, but officials declined to name interested
parties beyond denying press reports that they included ExonMobil.