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Sinopec, Exxon reach deal for Papua New Guinea gas

China's Sinopec announces deal with Exxon to buy Papua New Guinea natural gas

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On Wednesday November 4, 2009, 10:36 pm EST

BEIJING (AP) -- State-owned Sinopec Corp. said Thursday it has reached a preliminary agreement with Exxon Mobil Corp. to buy 2 million tons of liquefied natural gas annually from a project under development in Papua New Guinea.

The deal comes amid a flurry of agreements by Chinese state-owned energy companies to secure foreign oil and gas supplies for the country's booming economy.

The two sides are working on a final purchase agreement, a Sinopec senior vice president, Wang Zhigang, said in a statement. The company gave no financial terms.

Sinopec, also known as China Petroleum & Chemical Corp., said it would build a terminal in the eastern Chinese port of Qingdao to receive the gas.

Exxon Mobil, based in Irving, Texas, is developing gas fields in Papua New Guinea's central highlands and a pipeline to carry supplies to the coast of the South Pacific island nation.

Sinopec is Asia's biggest oil refiner by volume. Its shares are traded in New York, London, Hong Kong and Shanghai.

In August, Sinopec rival PetroChina Ltd. reached a $41 billion deal to buy natural gas from Australia's Gorgon field.

Sinopec Corp.: http://www.sinopec.com

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