If the deal goes through, it will be CNOOC’s fourth LNG operation in China.

XFN-Asia, citing a CNOOC executive, said, “We’ve reached an initial agreement with the local authority to build a LNG terminal in Shanghai. The deal will be finalised once talks with our joint venture partner is completed next month.”

Although the name of the JV partner is not known BP Plc has already collaborated with CNOOC on two earlier LNG project. BP executive Michael Smith had earlier announced in June of BP’s intention to be involved in the project

The Shanghai LNG terminal is expected to cost US$500 million.