The deal is part of a US$2.96 billion plan to set up LNG terminal in either Liaoning, Jiangsu and Shantou and their associated gas pipelines. The three terminals will have a combined processing capacity of 8.5 million tonnes per annum.

In a statement CNOOC said, “[The company] will be responsible for constructing the LNG terminal and major pipelines. The Liaoning provincial government will designate an as yet unconfirmed partner company to cooperate on the project.”

While no further details were made available, it is understood the Shantou terminal is the project to most likely proceed first as a pre-feasibility study on the first phase of construction of the terminal and its pipelines are set for completion by mid-2005.