Sinopec reaches LNG deal with Exxon Mobil

BEIJING, Nov. 5 (UPI) -- China Petroleum & Chemical Corp. signed a purchase deal for liquefied natural gas with Exxon Mobil Corp. in a sign of an expanding domestic gas market.

China Petroleum & Chemical Corp., Sinopec, and Exxon Mobil signed a preliminary agreement for the long-term supply of more than 2 million tons of LNG from Exxon's projects in Papua New Guinea.

The Papua New Guinea project is an integrated facility for gas production and processing, including onshore and offshore pipelines.

Sinopec will deliver LNG to Qingdao in Shandong province where the company plans to build a receiving terminal for the shipments, said Wang Zhigang, senior vice president of Sinopec.

"We hope that the working teams from both parties continue to work closely together to finalize the final purchase and sale agreement as soon as possible," he added.

Ron Billings, marketing vice president of Exxon Mobil Gas and Power, described the deal as a milestone.

"With this agreement in place, the project will conduct exclusive discussions with Sinopec and other major Asian LNG customers for binding sale and purchase agreements covering the full project capacity," he said.