AFX Europe (Focus): China's CNOOC still sees possibility of cooperation with Gorgon – Xinhua: “Gorgon is off Australia's western coast and is the country's largest discovered reserve to date, estimated at over 9.6 trln cubic feet.”: “Currently, Chevron has a 50 pct stake in the Gorgon project with ExxonMobil and Shell each holding a 25 pct share.”: Tuesday November 29, 2005

BEIJING (AFX) - China National Offshore Oil Corp (CNOOC) still sees the potential for extensive future cooperation with Australia's Gorgon gas project, provided that a gas supply deal is priced "suitably," the Xinhua news agency reported, citing the Chinese company's vice president.

"CNOOC and the Gorgon natural gas project are still in talks, and there are substantial opportunities for us to work together in the future," said Wu Zhenfang at the opening of yesterday's China Gas Summit 2005.

Wu's remarks follow an announcement last week that CNOOC's preliminary agreement to take a 12.5 pct stake in the Gorgon project had fallen through on pricing and timing issues.

As a buyer of Gorgon gas, CNOOC will be able to ensure its own supply "provided the price is suitable," Wu said.

He said the Gorgon price would be higher than that for gas supplied to CNOOC's gas terminal projects in Guangdong and Fujian provinces, "and would be in accord with market conditions."

Gorgon is off Australia's western coast and is the country's largest discovered reserve to date, estimated at over 9.6 trln cubic feet.

Annual natural gas production at Gorgon is now rated at 10 mln tons.

Currently, Chevron has a 50 pct stake in the Gorgon project with ExxonMobil and Shell each holding a 25 pct share.

andrew.pasek@xinhuafinance.com

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