Sinopec, Exxon sign deal for Papua New Guinea gas

[December 04, 2009]  BEIJING (AP) -- State-owned Sinopec Corp. said Friday it has signed a 20-year contract with Exxon Mobil Corp. to buy gas from Papua New Guinea, in the latest of a flurry of foreign deals to secure fuel for China's booming economy.

The liquefied natural gas will come from a project being developed by Exxon Mobil and other investors in Papua New Guinea's central highlands. Sinopec gave no financial details.

Sinopec, also known as China Petroleum & Chemical Corp., is China's second-biggest oil and gas company and Asia's biggest oil refiner by volume. Its shares are traded in New York, London, Hong Kong and Shanghai.

The contract calls for Sinopec to buy some 2 million tons of gas per year, which it will import through a terminal in China's eastern port of Qingdao.

The supplies "will play a positive role in meeting the local demand, optimizing the energy mix and improving the local environment," said Sinopec's senior vice president, Wang Zhigang, in a statement.

Other participants in the Papua New Guinea project are Australia's Oil Search Ltd., Japan's Nippon Oil Corp., Mineral Resources Development Co. and Petromin PNG Holdings Ltd., according to Sinopec.

Chinese energy companies have signed a multibillion-dollar string of deals to import oil and gas from the Gulf, Africa, Central Asia and elsewhere.

In August, Sinopec rival PetroChina Ltd. reached a $41 billion deal to buy natural gas from Australia's Gorgon field.

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On the Net:

Sinopec Corp.: http://www.sinopec.com/

[Associated Press]

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