Total and China National Oil Corporation sign expanded LNG agreement

March 27, 2014 | Budget & Investment, North Sea & Western Europe

Chinese President Xi Jinping (R) shakes hands with French President Francois Hollande.

Chinese President Xi Jinping (R) shakes hands with French President Francois Hollande.

Paris – France’s oil giant Total and China National Offshore Oil Corp. (CNOOC) on Wednesday inked a new supply agreement for the supply of Liquefied Natural Gas (LNG) and agreed a review of existing agreements and prices, the French company said in a statement.
The deal was signed during a State visit here by Chinese President Xi Jinping, who arrived in France Tuesday for three-days of talks.

Xi and his wife Peng Liyuan are being given VIP treatment on their four-day visit to France, with a state dinner in Paris and a concert at the Palace of Versailles, as the two countries celebrate 50 years of full diplomatic ties.

The Chinese president has paid tribute to former French leader Charles de Gaulle’s 1964 decision to break ranks with the United States and recognise the People’s Republic, paving the way for the communist state’s global acceptance.

“It established for the international community an example of peaceful co-existence and win-win cooperation between two countries with different social systems,” Xi wrote in an article published on Tuesday in the French daily Le Figaro.

Xi wrote that France was the first Western country to engage in civil nuclear energy cooperation with China, sign scientific and technical accords with Beijing, and launch direct flights to the country.

His trip, he added, would be about celebrating the long-standing friendship and also “about construction of the future and lifting our relationship onto a new level”.

Although France is far behind some of its European neighbours, most markedly Germany, in trade and investment links with China, it has been working hard to catch up.

President Francois Hollande announced Wednesday after bilateral talks that the two nations had signed contracts and investment deals worth USD 25 billion, including an Airbus contract for 70 planes worth an estimated catalogue price of USD 10 billion.

Total said in its statement that it had agreed to supply China with an additional one million tons per year of LNG on top of the one million it already supplies to CNOOC under an existing 15-year agreement signed in 2010.

The two companies will also review the price for the existing supply while setting a framework for the new additional quantities.

Total supplies more than 8.0 percent of the Chinese market for LNG and has delivered 5.0 million tons of LNG to China in the period from 2010 to 2014.

China is expected to see strong growth in demand in the coming years and CNOOC is already the third-largest global LNG importer with about 13 million tons annually.