Despite
signing preliminary agreements almost two years ago to sell more liquefied
natural gas to China, Qatar Liquefied Gas Co. has yet to sign contracts with
Cnooc Ltd. or PetroChina Co., Qatargas' chief representative in Beijing said Thursday.
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 Gulf 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.
Australia was the main
source of the 9.36 million tons of LNG imported into China in 2010, a year which
witnessed growth of 69% in imports. In the first five months of 2011, Qatar has edged out Indonesia
to take second place among suppliers, with China's overall imports up 24% on
year-earlier levels.
Qatar exported just 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 they (Cnooc) have the facilities ready, we will be ready to
deliver," he said. "We will reach 2 million tons, because the cargoes
have been coming."
Qatargas still expects to ship term LNG to PetroChina's Jiangsu terminal by the year-end, Hijji
said.
PetroChina and Cnooc have previous agreements with Qatargas to purchase up to 5
million tons a year of LNG.
Domestic rival China Petroleum & Chemical Corp., known as Sinopec
Corp., also recently entered into discussions with Qatar for LNG, but just how much it
wants isn't clear.
On Tuesday, Qatargas announced it has signed a heads of agreement with
Argentine power utility Energia Argentina Sociedad Anonima, or Enarsa, to
supply it with as much as 5 million tons of gas a year over 20 years, starting
in 2014.
Qatar holds the world's
third-largest natural gas reserves after Russia
and Iran.
It is the world's top LNG exporter by far with an installed capacity of 77
million tons a year, of which Qatargas has 42 million tons a year.