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CPC slated to sign multimillion dollar gas contract

State-run CPC Corp Taiwan (CPC, 台灣石油) is slated to sign a 20-year natural gas purchase contract on Friday worth NT$1.5 trillion (US$47.63 billion) with Woodside Energy Ltd, Australia's second-largest oil and gas producer, local media reported.

Both CPC and the Ministry of Economic Affairs refused to confirm the deal yesterday for fears of pressure from China to thwart it.

"I have no comment as such deals may be canceled if China tries to exert pressure," Minister of Economic Affairs Steve Chen (陳瑞隆) told reporters yesterday.

But Roger Martin, a spokesman at Perth-based Woodside, yesterday confirmed that its chief executive officer Don Voelte and CPC chairman Pan Wenent (潘文炎) will take part in a signing ceremony on Friday.

The agreement that will be signed is the same as a November accord that set out key terms including prices, he said.

In November, Woodside agreed to provide CPC with between 2 million and 3 million tonnes of natural gas annually, effective from 2013, an Economic Daily report said yesterday.

The contract will be the nation's largest natural gas purchase contract and worth more than the A$35 billion (US$32.38 billion) contract China and Australia signed in September.

CPC said the new deal will help resolve a domestic natural gas shortage after Indonesia's Badak field, which accounted for nearly 27 percent of the nation's natural gas supply, discontinued its contract with CPC this year.

Taiwan forecasts demand for liquefied natural gas (LNG) will rise 28 percent to 10.5 million tonnes in 2010 from last year, after construction of additional cleaner-burning gas-fired generators. CPC will spend between A$35 billion and A$45 billion for between 2 million and 3 million tonnes annually over 20 years from Woodside's proposed Browse project off northwestern Australia, Martin said.

Woodside, 34 percent owned by Royal Dutch Shell Plc, is the operator of the Browse LNG project, in which BHP Billiton Ltd, BP Plc, Chevron Corp and Shell have stakes. Voelte said last week that Woodside would market LNG from the project on behalf of the venture partners.

Woodside signed a similar accord in September to sell the same volume of LNG from the Browse project to PetroChina Co.
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