Reuters reported that CNOOC senior vice president Cao Yunshi did not give a reason for why the talks had been terminated, quoting him as saying: “Gorgon is finished.”

In October 2003, CNOOC signed a preliminary agreement to buy $A30 billion of LNG from Gorgon and a 12.5% stake in the project.

Last November, Chevron announced that the equity agreement had fallen through on unresolved pricing and timing issues.

But at the time, another CNOOC official reiterated that the company was still interested in securing an LNG supply contract from the project.

LNG prices have multiplied three or fourfold since China first agreed to obtain supplies. CNOOC has had trouble accepting that it must now pay significantly higher prices.

China has not secured any new LNG contracts since 2002, which raises questions over the future of the eight or so new import terminals it is considering building.

But last Friday, CNOOC chief financial officer Yang Hua was quoted by News Limited as saying the company was in talks with a number of potential gas suppliers, which could include Chevron.

“We have been talking to every possible partner. I guess they (Chevron) are not excluded,” he said, according to the news service.