China downplays Woodside gas deal

BEIJING, Jan. 6 (UPI) -- The passing of a deadline between Australia's Woodside Petroleum and PetroChina for gas supplies will not result in shortages for China, energy analysts said.

Woodside announced Monday a deadline for a $40 billion deal with PetroChina expired without a formal agreement. The deal called for the shipment of more than 2 million tons of liquefied natural gas from Woodside's Browse LNG project in Australia.

The Chinese side said the deal collapsed because Woodside would not be able to meet its LNG export obligations in the time outlined in earlier agreements.

Energy analysts said the failed Woodside deal will have a minor impact on the Chinese domestic gas market, China's official Xinhua news agency reports.

Liy Yijun, who teaches at the China University of Petroleum, said the Woodside deal would account for only 4.5 percent of the annual gas consumption in China.

"Considering that China's natural gas market would further expand in 2013, the loss of supply from Woodside would not have a significant impact on China's domestic supply," he said.

Chinese President Hu Jintao, meanwhile, joined the leaders of Turkmenistan, Kazakhstan and Uzbekistan in December for the inauguration of a 1,138-mile pipeline to deliver gas from Turkmenistan to China.

It has the capacity to pump some 1.6 trillion cubic feet of gas per year, allaying some of the gas concerns for China.