Shell Eastern LNG (Shell) and PetroChina International Company Limited (PetroChina) have concluded a binding Heads of Agreement (HOA) for the long-term supply of liquefied natural gas (LNG) with the primary source being the Gorgon project in Western Australia. The HoA constitutes a milestone in the development of LNG supplies to China.
The HOA 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 2008. During the 20-year contract term, Shell will sell one million tonnes per annum of LNG to PetroChina. The Shell-PetroChina agreement is conditional upon a Final Investment Decision being taken by the Gorgon Joint Venture Partners.