21:20 09Nov2006 Sinopec still in talks with gas suppliers-official
BEIJING, Nov 9 (Reuters) - China's top refiner Sinopec Corp. <0386.HK> is still in talks with natural gas suppliers including Iran and hopes for a breakthrough in the near future, a top company official said on Thursday.
"We are seriously talking with relevant parties and hope for progress in the near future," Liu Enxue, vice president of Sinopec's gas unit, said on the sidelines of the China Gas Summit conference. He did not elaborate.
Sinopec signed a preliminary deal worth as much as $100 billion with Iran in 2004 to import 10 million tonnes of liquefied natural gas a year for 25 years. In return the firm was to take the lead to develop the huge Yadavaran oilfield.
But little progress has been made since as th parties differ widely in their estimates of the reserves of the field.
Sinopec is also negotiating with some Southeast Asian gas companies to secure LNG supplies to feed its new gas terminals under construction in southern China, Liu said.
He said the company is a late comer in the coastal LNG market compared with China National Offshore Oil Co., or CNOOC <0883.HK>, which is operating a LNG project in Guangdong and preparing two others in Fujian and Shanghai.
China is facing a growing natural gas shortage as constraints in infrastructure and regulated caps on domestic gas prices curb field development, and as its plans to import LNG fall behind schedule.
Local gas supply shortage is expected to reach 40 billion cubic metres a year by 2010, according to Liu. He didn't provide any estimate for this year.
Separately, Sinopec said in a report posted Thursday on the State-owned Assets Supervision and Administration Commission's Web site (www.sasac.gov.cn) that it expects natural gas output in 2006 to rise 11.5 percent to 7 billion cubic metres.
((Reporting by Jim Bai and Chen Aizhu; editing by James Jukwey; jim.bai@reuters.com; Reuters Messaging: jim.bai.reuters.com@reuters.net; +86 10 6598 1271))
Keywords: ENERGY CHINA SINOPEC
Thursday, 09 November 2006 21:20:22
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