North West Shelf Australian LNG President Peter Cleary congratulated the Guangdong Dapeng LNG Company Ltd on the safe and successful commissioning of the plant.

“As the first international supplier of LNG into China, Australia LNG, on behalf of the North West Shelf Venture participant companies, is very proud to be associated with this state-of-the-art project,” Cleary said

He was speaking at the official celebration in Guangdong, which also saw the latest arrival of Australian LNG in China onboard the project ship, the Northwest Swan.

“We would like to congratulate our Chinese customers. We look forward to meeting their energy requirements, through safe and reliable deliveries of LNG, over the next 25 years.”

While the NWS partners have been talking up the importance of their Chinese contract, the partners – excluding operator Woodside Petroleum – have also been asking the Australian Government to help in renegotiating the low prices – equivalent to $US25 per oil barrel equivalent – that are locked in by the contract.

The 25-year gas contract signed in 2002 did not contain clauses that would allow the six equal NWS partners – Woodside Energy, BHP Billiton, BP, Chevron, Japan Australia LNG and Shell – to alter prices in line with changes in the oil price.

This failure to account for booming oil and gas prices will reportedly cost up to $A20 billion in lost revenue.

But Prime Minister John Howard has rejected the NWS partners’ calls to help them renegotiate the LNG contract. In Guangdong today, he told Chinese officials that Australians honour their commitments.

China has expressed reluctance to pay prevailing prices for LNG after signing a contract with the North West Shelf venture at fixed prices four years ago. Since then, global LNG prices have risen dramatically.

“Australia is a stable, reliable, competitive supplier of energy,” Howard told an audience of more than 400 people.

“We deliver our commodities on time, we deliver them safely and we deliver them according to the pre-arranged and agreed price.”

Since signing the Chinese contract in 2002, no Australian firms have been unable to sign any subsequent deals with Chinese buyers as the Chinese have baulked at paying current market prices.

Indonesia’s Tangguh project in West Papua also sells LNG cheaply to China was set to provide cheap LNG, but the Indonesian Government managed to renegotiate the price cap, which is now $US38 per oil barrel equivalent – still well below the current price of $US70.