$8.5bn Deal With China - 27 September, 2002

A consortium, including BP of the UK and Pertamina, signed a 25-year deal with China's National Offshore Oil Corp to supply gas from the Tangguh field in the remote eastern province of Papua to a terminal on the Fujian coast across from Taiwan.

The Tangguh project is one of the largest investments in Indonesia. The deal secures the future of the scheme, which is operated and 50 per cent owned by BP.

CNOOC is confident enough to acquire a 12.5 per cent stake in the Tangguh project as part of the deal.BP has not decided yet how much of its stake in the project will be sold to CNOOC and how much will come from other project partners.

Construction is expected to begin this year, with the first gas to be piped out in 2006.

Tangguh is expected to produce some 7m metric tonnes of LNG a year.