BHP Billiton today announced it had signed, together with the other participants in the North West Shelf (NWS) Venture, further agreements with a related entity of the China National Offshore Oil Corporation (CNOOC) with regard to the equity participation by CNOOC in the North West Shelf Project. The agreements give effect to the key terms agreed with CNOOC in October 2002 and follow on from the sale and purchase agreements to supply gas to China's Guangdong liquefied natural gas (LNG) project.

Under the equity agreements, CNOOC will purchase an interest in a new joint venture that is being established within the NWS Project to supply LNG to the Guangdong LNG Project in China. It will acquire title to a proportion of North West Shelf gas reserves and rights to process its gas and associated liquefied petroleum gas and condensate through North West Shelf Venture offshore and onshore infrastructure. CNOOC will participate with a 25% share in the new joint venture, the "China LNG Joint Venture" and each of the six original NWS participants will hold 12.5%.

CNOOC will also pay a tariff to the NWS Venture participants for access to the processing infrastructure.

The transaction does not include equity in, or access to, oil reserves or oil production facilities.

Last October, Sale and Purchase Agreements were signed between the NWS Venture participants and the companies comprising the Guangdong LNG Project, including CNOOC, for the purchase and supply of approximately 3.3 million tonnes of LNG per year to Phase One of the project, China's first LNG import project which will be located in the country's fastest growing Province.