China National Offshore Oil Company Limited (CNOOC Ltd.) announced on Monday that it had reached agreement with Canada-based Talisman Energy Inc. to sell a 3.06 percent working interest in the Tangguh liquefied natural gas (LNG) project for 212.5 million U.S. dollars.

According to a notice on the CNOOC web site, the transaction had been completed through the equity transfer of an indirect subsidiary of CNOOC Ltd. and became effective on Jan. 1.

The Tangguh LNG Project, located in West Papua, Indonesia, consists of a number of offshore gas wells, production facilities, pipelines and LNG facilities with a designed annual production capacity of 7.6 million tons.

The project comprises three production sharing contract (PSC) areas, which are the Berau, Muturi and Wiriagar PSCs.

Before the transaction, CNOOC Ltd. owned 16.96 percent of the working interests in the Tangguh project. The other owners were BP Berau Ltd. with a 37.16 percent stake, MI Berau (16.30 percent), Nippon Oil Exploration of Japan (12.23 percent), KG Berau (10 percent) and LNG Japan Corporation (7.35 percent).

The agreement between CNOOC and Talisman was consistent with the portfolio management strategy of CNOOC to maximize shareholder value, according to Fu Chengyu, chairman and chief executive officer of CNOOC.

Talisman's participation in developing the gas business in Tangguh would bring generous returns to the company and the shareholders, he said.

As the LNG provider of CNOOC's LNG project in southeastern Fujian Province, the Tangguh LNG project is projected to supply 2.6 million tons of LNG annually from 2009 in a contract term of 25 years.

The Tangguh LNG plant is expected to commence initial production by the last quarter of 2008. The use of LNG, a clean, efficient form of energy, is expected to relieve the pressure of the soaring demand for electricity in Fujian and improve the province's energy structure.

Incorporated in Hong Kong, CNOOC Ltd. is a listed subsidiary of China National Offshore Oil Corporation, China's largest offshore oil producer.

(Xinhua News Agency January 29, 2008)