Piping hot: $50b gas deal with China
THE largest single trade deal in the nation's history - a $50 billion contract to sell liquefied natural gas to China - was sealed in Beijing last night, signalling the resources boom is far from over.
The contract, hailed by the Federal Government as an indicator Australia's relationship with Beijing remains sound, will supply China with gas for 20 years.
The gas will come from the Gorgon project off Western Australia. The joint venture between ExxonMobil, Shell and Chevron is expected to start production in five years and contains deposits worth $300 billion.
ExxonMobil signed the deal with the state company PetroChina in Beijing. It is twice the value of the deal the Gorgon partner signed last week with India.
The Resources Minister, Martin Ferguson, flew to China to witness the signing, saying it showed Australia had a future as ''a global energy superpower''.
''This agreement is testimony to the strength of Australia's continuing trade and investment relationship with China,'' he said. ''As China continues to develop as a modern global industrial and commercial powerhouse, Australia is committed to walking with it on its remarkable journey.''
In Parliament yesterday, the Prime Minister, Kevin Rudd, claimed credit for facilitating the Gorgon project. On Monday, the Federal Government and the Western Australia Liberal Government removed a hurdle to the project by agreeing to indemnify a massive underground storage of carbon dioxide the project will generate.
Mr Rudd said the project would be worth 5 per cent of the nation's gross domestic product. It would deliver the Government $40 billion in revenue over 30 years and would generate 6000 jobs at the peak of construction, effectively making it a third stimulus package.
''That is why the Australian Government, together with other partners, has been actively engaged in deliberations on this,'' he said.
Mr Rudd said the deal would ''supercharge the LNG industry'' and benefit the entire economy.
The deal came as Canberra's relationship with Beijing was under the spotlight. A Herald/Nielsen poll published on Monday found 58 per cent of voters approved of the way Mr Rudd was handling the relationship.
It has been under strain at a diplomatic level following the failed bid by Chinalco to increase its stake in Rio Tinto, the arrest of the Rio Tinto executive Stern Hu and the decision to grant a visa to the exiled Uighur leader Rebiya Kadeer.
Unaware of the deal, the Opposition Leader, Malcolm Turnbull, said relations with China were ''at the lowest ebb they have been for many, many years''.
The Foreign Minister, Stephen Smith, told Parliament Beijing had made it ''very clear'' it was unhappy with Ms Kadeer's visit. He confirmed China also cancelled talks at the Pacific Island Forum involving the Vice Foreign Minister, He Yafei, to discuss Mr Rudd's plan for a Asia-Pacific regional body.
He hinted there was a threat China could withdraw support for the idea. ''If, of course, China takes any further action in response to our decision that will be for us a matter of regret and we will deal with that sensibly.''
Mr Smith said ''from time to time'' all bilateral relationships experienced difficulties but Australia enjoyed a ''long-standing, productive economic relationship'' with China.
Source is full of hot air DAMN!
I'm glad I saw this article posted earlier today, because it made me rethink Australia's relationship with China and how awkward it must be to want to negotiate big trade deals but have other diplomacy issues.
Also I never know what to post in this comm, because it's so US focussed. So I don't.