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August 19, 2009

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Home » Business » Energy

China seals biggest trade deal with Aussie

CHINA and Australia struck their biggest trade deal ever yesterday as the world's two most valuable listed oil companies, Exxon Mobil and PetroChina, agreed a US$41 billion liquefied natural gas deal.

"It's a statement about the nature of our two economies and the fact that Australia is important to China, just like China is important to Australia," Australian Resources Minister Martin Ferguson said in Beijing.

The massive Gorgon LNG project operated by Chevron Corp, which owns a 50 percent stake, is located off Western Australia and has a proposed annual output of 15 million tons per annum. Exxon and Royal Dutch Shell each owns 25 percent.

The agreement with PetroChina means buyers have now been found for all of Exxon's share in Gorgon, the United States oil giant said. It comes just weeks after Exxon inked a A$10 billion (US$8.26 billion) Gorgon sales deal with India's Petronet.

The deals, along with the regulatory approval process from the federal government now nearing completion, mean the Gorgon partners could approve the massive project as early as next month.

"The A$50 billion contract to supply PetroChina is a foundation contract that will assist in getting the Gorgon LNG project to final investment, and that again would represent the biggest stand-alone project in Australia's history," said Ferguson.

The deal comes despite tensions between the two countries. China has expressed displeasure over Australia's decision to grant a visa to a Uygur separatist, and Australian has voiced concerns over China's arrest of four Rio Tinto employees on charges of infringing trade secrets and bribery.

But Ferguson said the major gas deal proves the two countries have a solid relationship.

"This agreement is testimony to the strength of Australia's continuing trade and investment relationship with China," Ferguson said. "As China continues to develop as a modern global industrial and commercial powerhouse, Australia is committed to walking with it on its remarkable journey."


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