China's US$18 billion west-to-east gas pipeline project has become bogged down indefinitely by bureaucracy and disagreements, Royal Dutch/Shell chairman Sir Philip Watts was quoted as saying yesterday.
Agreements over contract terms for the 3,900km pipeline being built by China's leading oil company PetroChina and a consortium of foreign partners led by Royal Dutch/Shell had taken "longer than expected," the Financial Times reported.
The newspaper said Watts remained optimistic a deal would be struck but quoted him as saying he "had to be very dogged about the terms expected because you're putting billions of dollars of Shell's money into it."
The delay is likely to raise concerns, first put forward by BP in 2001 when it withdrew from the deal, that Shell may be forced to settle for returns lower than its original 15 percent target, the newspaper said.
China's state media, citing sources close to the project, said last month that if a deal cannot be finalized by the end of this year then PetroChina may proceed with the project on its own.
"The negotiations are now in a stalemate," said the government mouthpeice People's Daily on Aug. 13. "The foreign side has asked the Chinese side to guarantee a 15 percent return on investment, which the Chinese side can't do since each project has its risks."
Under a framework agreement signed in July of last year, PetroChina owns half of the pipeline to pump gas from China's western Xinjiang province to its energy-hungry eastern cities.
Shell, Exxon Mobil and Russia's Gazprom each hold 15 percent, while Chinese refiner Sinopec holds a five percent stake.
The Financial Times said the project lacks customers and is faced with a postponement of its 10-year break-even point.
PetroChina, which has yet to secure a single supply contract for the gas, has been unable to agree a price for sales in China's eastern provinces.
The Central Weather Administration (CWA) yesterday said it expected to issue a sea warning for Typhoon Fung-Wong tomorrow, which it said would possibly make landfall near central Taiwan. As of 2am yesterday, Fung-Wong was about 1,760km southeast of Oluanpi (鵝鑾鼻), Taiwan’s southernmost point, moving west-northwest at 26kph. It is forecast to reach Luzon in the northern Philippines by tomorrow, the CWA said. After entering the South China Sea, Typhoon Fung-Wong is likely to turn northward toward Taiwan, CWA forecaster Chang Chun-yao (張峻堯) said, adding that it would likely make landfall near central Taiwan. The CWA expects to issue a land
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The Central Weather Administration (CWA) yesterday said it is expected to issue a sea warning for Typhoon Fung-wong this afternoon and a land warning tomorrow. As of 1pm, the storm was about 1,070km southeast of Oluanpi (鵝鑾鼻), Taiwan’s southernmost point, and was moving west-northwest at 28 to 32kph, according to CWA data. The storm had a radius of 250km, with maximum sustained winds of 173kph and gusts reaching 209kph, the CWA added. The storm is forecast to pass near Luzon in the Philippines before entering the South China Sea and potentially turning northward toward Taiwan, the CWA said. CWA forecaster Chang Chun-yao (張峻堯) said
PREPARATION: Ferry lines and flights were canceled ahead of only the second storm to hit the nation in November, while many areas canceled classes and work Authorities yesterday evacuated more than 3,000 people ahead of approaching Tropical Storm Fung-wong, which is expected to make landfall between Kaohsiung and Pingtung County this evening. Fung-wong was yesterday morning downgraded from a typhoon to a tropical storm as it approached the nation’s southwest coast, the Central Weather Administration (CWA) said, as it issued a land alert for the storm. The alert applies to residents in Tainan, Kaohsiung, Pingtung and Taitung counties, and the Hengchun Peninsula (恆春). As of press time last night, Taichung, Tainan, Kaohsiung, and Yilan, Miaoli, Changhua, Yunlin, Pingtung and Penghu counties, as well as Chiayi city and county had
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