PetroChina links with US firm ConocoPhillips for gas exploration

PUBLISHED : Thursday, 21 February, 2013, 10:58am
UPDATED : Friday, 22 February, 2013, 5:27am

PetroChina has agreed to invest in two natural gas exploration projects in Western Australia in partnership with the US oil major ConocoPhillips, with the two companies also joining hands to explore for shale rock gas in south-west China.

Analysts said the move signifies PetroChina's confidence in the development potential of Australian gas projects despite concerns over rising costs, and its cautious attitude toward splashing money at gas projects in the United States and China.

PetroChina, the nation's largest oil and gas producer, has agreed to acquire a 20 per cent interest in the Poseidon field in Browse Basin, off the coast of north-west Australia. It will also buy a 29 per cent stake in the Goldwyer onshore shale gas project in the Canning Basin in Western Australia.

No financial terms were disclosed by either company.

The two companies will also sign an agreement to jointly explore for gas trapped in shale rock formations over an area of 2,000 square kilometres in the Neijiang-Dazu area in the Sichuan basin in south-west China.

A report from the American research company Sanford Bernstein said: "China is increasingly pivoting to Australia, Canada and emerging markets like East Africa to meet its long-term liquefied natural gas needs."

While Japan, the world's largest importer of LNG, has expressed strong interest in importing LNG from the US, analysts at Sanford Bernstein said mainland state-backed energy firms are less keen because of trade restrictions and their strategic decision to avoid long-term reliance on LNG from the US.

Steep falls in US gas prices in the past few years on the back of oversupply and a sharp increase in output of gas from shale rocks has made US LNG exports to East Asia competitive, despite the long distances involved.