China signed an agreement with Indonesia in 2002 to import 2.6 million tonnes per year from Tangguh over 25 years.

But now Indonesia has reportedly asked state-owned CNOOC to pay more for LNG from Tangguh to reflect recent LNG price climbs, which are linked with oil prices.

Chinese newspaper China Daily and the Xinhua news agency quoted an unnamed CNOOC official as saying: “We are negotiating. But producers should not over-estimate the affordability of a developing country like China.”

“China may become a big LNG market, but it all depends on price,” the official was also quoted as saying.

The official’s comments are a further indication that China is not prepared to pursue LNG imports at any cost, despite its environmental benefits compared with coal, the country’s main energy source.

It could also mean that LNG producers looking to secure Asian markets may need to look at other areas.

While China has plans to develop up to 10 LNG terminals, so far the country has only sealed two long-term deals to import about 6 million tonnes of LNG from Tangguh and the North-West Shelf.

Last year, CNOOC suspended an agreement with Chevron Australia to secure long-term LNG supplies from the Gorgon project in Western Australia due to price disagreements. Gorgon partners subsequently started signing up Japanese and Indian companies.