The agreement covers the key terms of the transaction and provides that Shell and PetroChina will work together to conclude and execute a detailed LNG sale and purchase agreement before December 2008.
During the 20-year contract term, Shell will sell one million tons per annum of LNG to PetroChina. The Shell-PetroChina agreement is conditional upon a final investment decision being taken by the Gorgon Joint Venture Partners.
Jon Chadwick, executive vice president of Shell gas & power Asia, said: Shell is delighted to have secured this strategic agreement with PetroChina, which sets a new benchmark for LNG supplies into China and underlines Shell’s commitment to Chinese LNG customers and to the Gorgon project.
