The heads of agreement covers the key terms of the transaction and provides that Shell and PetroChina will work together to conclude and execute a detailed LNG Sale and Purchase Agreement before December next year.

But the Shell-PetroChina deal is conditional upon a final investment decision being taken by the Gorgon Joint Venture Partners.

The deal is significant as Chinese companies have held off from LNG purchases over the last few years, saying that the prices demanded were too high.

The PetroChina deal could be a sign that the Chinese have finally accepted market realities.