PetroChina Co agreed to buy as much as A$60bil of Australian liquefied natural gas in two accords signed this week, as China's demand for the fuel forces it to accept prices that have tripled in five years.
Asia's biggest oil company by market value would buy as much as three million tonnes a year of LNG from Woodside Petroleum Ltd's Browse project in Western Australia under an initial agreement, Woodside said in a statement yesterday.
The 15 to 20-year accord would start as soon as 2013. PetroChina this week agreed with Royal Dutch Shell Plc to buy LNG from the Gorgon venture.
Global LNG contract prices have been driven higher by increasing demand from power companies for cleaner burning fuels and delays in supply projects caused by a jump in plant construction costs.
China is returning as a customer for Australian LNG five years after a contract signed by China National Offshore Oil Corp at near record-low prices.
“Woodside wouldn't be selling the LNG now unless the Chinese had changed their minds on pricing,'' said Stuart Baker, a Melbourne-based oil and gas analyst at Morgan Stanley. “If the Chinese stick to the pricing structure they agreed last time round in 2002 or 2003, then they are not going to get access to supply, full stop.''
The agreement by Australia's second largest oil and gas producer to sell Browse LNG to PetroChina would, if confirmed, be the country's biggest export deal, Resources Minister Ian Macfarlane said yesterday.
The transaction was worth between A$35bil and A$45bil in revenues, Woodside chief financial officer Mark Chatterji said in a briefing document lodged with the exchange.
Asia's biggest oil company by market value would buy as much as three million tonnes a year of LNG from Woodside Petroleum Ltd's Browse project in Western Australia under an initial agreement, Woodside said in a statement yesterday.
The 15 to 20-year accord would start as soon as 2013. PetroChina this week agreed with Royal Dutch Shell Plc to buy LNG from the Gorgon venture.
Global LNG contract prices have been driven higher by increasing demand from power companies for cleaner burning fuels and delays in supply projects caused by a jump in plant construction costs.
China is returning as a customer for Australian LNG five years after a contract signed by China National Offshore Oil Corp at near record-low prices.
“Woodside wouldn't be selling the LNG now unless the Chinese had changed their minds on pricing,'' said Stuart Baker, a Melbourne-based oil and gas analyst at Morgan Stanley. “If the Chinese stick to the pricing structure they agreed last time round in 2002 or 2003, then they are not going to get access to supply, full stop.''
The agreement by Australia's second largest oil and gas producer to sell Browse LNG to PetroChina would, if confirmed, be the country's biggest export deal, Resources Minister Ian Macfarlane said yesterday.
The transaction was worth between A$35bil and A$45bil in revenues, Woodside chief financial officer Mark Chatterji said in a briefing document lodged with the exchange.