China National Offshore and Oil Corp plans to build a liquefied natural gas (LNG) terminal in the Yangtze River delta to import gas from an Australian gas field its listed unit, CNOOC, is negotiating to buy into.
The project will form another piece in China National's ambitious plan to build a pipeline network covering the entire mainland coastline.
It is expected to compete head-to-head with PetroChina's west-east pipeline project, which also targets the prosperous coastal provinces of Zhejiang, Jiangsu and the city of Shanghai, as well as the inland provinces of Anhui, Henan and Shanxi.
Red chip CNOOC, China's dominant oil producer, aims to close a deal this year to buy a 12.5 per cent stake in Western Australia's offshore Gorgon gas project, chief financial officer Mark Qiu Zilei said. A letter of intent was signed in October.
Gas production is targeted to start between 2008 and 2010, and China National plans to build a terminal to receive and regasify liquefied gas shipped from Gorgon.
The terminal eventually will be linked by a trunk pipeline with China National's terminals under construction in Guangdong and Fujian, as part of the company's long-term plan to build a pipeline network stretching from Guangxi in the southwest to Heilongjiang in the northeast.
Mr Qiu said it had not been decided whether China National would join with a partner to build the terminal, but added that a partnership was looking more likely.