By Angela Macdonald-Smith
April 16 (Bloomberg) -- China National Offshore Oil Corp., the country’s biggest offshore petroleum explorer, agreed to work with InterOil Corp. on a proposed liquefied natural gas project in Papua New Guinea.
The initial accord commits the Chinese company, InterOil and the Papua New Guinea-owned Petromin PNG Holdings Ltd. to agreeing commercial terms for the financing of the government’s stake in the project, Petromin said today in an e-mailed statement.
Papua New Guinea granted initial approvals last month for the Pacific nation’s second LNG project, which would follow a plant proposed by an Exxon Mobil Corp.-led venture. InterOil hired BNP Paribas Capital (Singapore) Ltd. and ABN Amro Corporate Finance Australia Ltd. in March to advise on the sale of interests in the LNG project and associated gas fields to strategic partners.
“Both InterOil and Petromin have commenced discussions with a number of major oil and gas companies to bring in a strategic partner to the InterOil project who will underwrite the project,” Petromin Managing Director Joshua Kalinoe said in the statement. “The heads of agreement now allows China National Oil to participate in that process.”
Kalinoe didn’t say whether China National, the Beijing- based parent of Hong Kong-listed Cnooc Ltd., would have a stake in the project. The venture would cost about $5 billion for a plant producing about 3.5 million metric tons a year of LNG, with shipments due to start in 2014, InterOil said last month.
Cnooc Group spokesman Li Shiqiang and Xiao Zongwei, who speaks for the listed unit, said they weren’t aware of the agreement.
The accord was signed yesterday in Beijing after talks between Chinese Premier Wen Jiabao and Papua New Guinea Prime Minister Michael Somare, Petromin said.
LNG is natural gas chilled to liquid form for transportation by tanker to destinations not connected by pipeline.
To contact the reporter on this story: Angela Macdonald-Smith in Sydney at amacdonaldsm@bloomberg.net
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