OREANDA-NEWS. July 06, 2011. Despite signing preliminary agreements almost two years ago to sell more LNG to China, Qatar Liquefied Gas Co has yet to sign contracts with CNOOC or PetroChina, QatarGas’ chief representative in Beijing said. QatarGas has received approval from China’s National Development and Reform Commission to negotiate with CNOOC, but still isn’t authorized to begin talks with PetroChina, QatarGas’ Abdulla Hijji said on the sidelines of a conference in Beijing.

QatarGas is the country’s largest producer of LNG. CNOOC and PetroChina signed separate memorandums of understanding with Qatar in November 2009 to purchase a combined 7 million tons a year of LNG. Relatively high international gas prices, increasing deliveries of pipelined gas from central Asia, piped-gas arrivals via Myanmar and possibly Russia in several years’ time, and further out the possible availability of large volumes of Chinese shale gas, are clouding LNG’s future role in China.

Hijji said discussions with PetroChina would only begin after a deal had been reached with CNOOC, which hopefully will happen by the end of this year. “We’ve come a long way, but it’s not easy, of course,” Hijji said, adding that negotiations were far more complicated than just deciding on price. A cap on China’s domestic gas price has recently discouraged CNOOC and PetroChina from boosting LNG imports to meet rising demand from Chinese residential and industrial users. However, both companies are still on track this year to import their contracted volumes, Hijji said.
 
Qatar exported 1.2 million tons of LNG to China in 2010, despite a long-standing contract with CNOOC to supply up to 2 million tons a year. However, QatarGas will probably export full term volumes to CNOOC this year, Hijji said. “When CNOOC has the facilities ready, we will be ready to deliver,” he said. “We will reach 2 million tons, because the cargoes have been coming.”