By Wan Zhihong (China Daily)
Updated: 2008-01-29 09:29

CNOOC Ltd, the listed arm of China's third largest oil company, said yesterday it has sold part of its stake in Indonesia's Tangguh liquefied natural gas project for $212.5 million.

CNOOC sold 3.06 percent of its interest to Talisman Energy Inc, headquartered in Calgary, Canada, on Jan 1, the company said in a statement.

Before the transaction, CNOOC held 16.96 percent of the Tangguh project. "We still hold a significant stake in the Tangguh project and welcome Talisman as a new partner to further develop the gas business," said Fu Chengyu, chairman and CEO of the company.

Talisman, Canada's No 3 independent oil producer, previously filed a lawsuit against CNOOC, claiming it was entitled to 44 percent of CNOOC's stake in the project.

The Tangguh LNG Project, located in West Papua, Indonesia, comprises a number of offshore gas wells, production facilities, pipelines and LNG plant facilities with a capacity of 7.6 million tons per year.

CNOOC signed a deal in 2006 to source gas for its Fujian terminal from the Tangguh field. It also signed a contract with Petronas of Malaysia for its terminal in Shanghai.

The Fujian project will receive 2.6 million tons of LNG annually from the Tangguh field from 2009, while the Shanghai project is expected to take in three million tons a year from Malaysia from 2012.

CNOOC's LNG terminal in Shenzhen was put into operation in June in 2006. The terminal, supplied by natural gas from Australia, is also the first LNG terminal in China.

CNOOC will import 25 million tons of LNG annually by 2010, a company source told China Daily earlier.

LNG is natural gas that has been chilled to a liquid for transportation by ship to destinations not connected by pipeline. China, the world's second biggest energy consumer, plans to boost its natural gas production 50 percent by 2010 to meet increasing demand.

"The nation's gas production will be 90 billion cubic meters in 2010. Natural gas will then account for 5.3 percent of the nation's total energy consumption," Yang Zhiyi, deputy general manager of Sinopec Natural Gas Co Ltd, said earlier.

China's natural gas demand is projected to reach 140 billion cubic meters in 2010, when the country will import around 20 billion cubic meters of natural gas, he said.