AusRAIL, Market Sectors

WA hails LNG and iron ore deals with China

<p>Western Australia premier Alan Carpenter and the chairman of China’s National Development Reform Commission, Ma Kai, witnessed the signing of major resources agreements with Chinese interests yesterday involving Shell and Rio Tinto (Tuesday, September 4).</p> <p>Shell has agreed to supply liquefied natural gas (LNG) to China from the troubled Gorgon project off WA. </p> <p>Shell Eastern LNG and PetroChina International have concluded a binding heads of agreement covering the supply of 1m tonnes of LNG a year over 20 years.</p> <p>Gorgon would be the &#8220primary source&#8221 of the LNG, Shell said.</p> <p>Shell and PetroChina would work to conclude a detailed LNG sale and purchase agreement before December 2008.</p> <p>The agreement is conditional upon a final investment decision being taken by the Gorgon joint venture partners.</p> <p>However, Gorgon partner ExxonMobil was recently quoted as saying the project could not go ahead at present cost levels and may be moved from its proposed location at Barrow Island.</p> <p>Two agreements were inked between SinoSteel Corp and Rio Tinto which lock in continued negotiations on the expansion of the Channar Mining Joint Venture iron-ore project in the Pilbara.</p> <p>The existing agreement has already produced and supplied about 200m tonnes of iron-ore worth about US$10bn ($12m).</p> <p>&#8220China is now WA’s highest ranked trading partner, with exports from WA to China now valued at almost $14bn,&#8221 Mr Carpenter said.</p> <p>&#8220The agreements I witnessed today will help enhance our relationship.&#8221</p> <p>Meanwhile, Chinese president Hu Jintao has been told of the importance of China to Australia’s mining industry as he toured a CSIRO research facility in Perth, the ABC reported.</p> <p>Mr Hu was welcomed to the Australian Resources Research Centre in Perth this morning by executives from BHP Billiton and the CSIRO.</p> <p>A BHP Billiton spokesman said that China was now the company’s biggest customer.</p> <br />