It is reported that CNOOC will sign LNG contract with BP (British Petroleum) about long-term supplying LNG to China. Contract value is close to 5 trillion pounds (about 52.7 trillion RMB) during the visit to Britain carried out by Li Keqiang, the Prime Minister of China. The contract will become the biggest one about China importing LNG, if it is signed successfully. 

 

A personnel from headquarter of CNOOC disclosed that the contract was still not signed officially and the contract amount was not exact. 

 

He also said that global procurement contracts of LNG did not contain specific prices. Prices float with international oil prices or gas prices on futures market. In 

 

2012, CNOOC signed LNG contract with BG to import 5 million tons LNG annually for 20 years. Other contracts will be signed based on the same principle. 

 

However, except for uncertainties of overseas purchasing, the reformation of domestic gas prices is the largest barrier. In 2010, CNOOC suffered from huge losses which continued in 2012, for inversion of gas prices. 

 

The LNG contract is one of the largest trade contracts between China and Britain. However, neither CNOCC nor BP publishes the details including the source of gas, prices and target, which are different from the contract with BG. Based. On the contract, BG supplies 5 million tons LG to CNOCC. Otherwise, BG opens investment interests of a series programs to CNOCC in Australia.