First gas shipment on way to China - Breaking News - Business - Breaking News

The first shipment of liquified natural gas (LNG) under Australia's largest export contract has been loaded at Karratha in Western Australia.

The 25-year LNG contract with China was finalised in October 2002 and is worth $25 billion.

The joint venture shipment aboard the Northwest Seaeagle is headed for Guangdong, where it is expected to be received at a new terminal later this month.

Acting Prime Minister and Trade Minister, Mark Vaile, who was at Karratha for the occasion, said the 3.3 million tonne contract had entrenched Australia's standing as one of the world's top LNG suppliers.

"Our LNG companies have won a reputation for reliability and quality second to none," Mr Vaile said in a statement.

"The Guangdong contract reinforces that reputation."

The shipment was a milestone in Australia's economic relationship with China, Mr Vaile said.

"Australia has been supplying China with a wide range of minerals for several decades and now we are moving into a new chapter of energy cooperation", he said.

"Over the coming years, Australian gas will be supplying households, power plants and businesses in Guangdong, one of Australia's most important economic partners."

West Australia Premier Alan Carpenter, also in Karratha, said would go down as one of the most significant days in the state's economic history.

"This is the first contract by China for LNG, and the inaugural shipment from WA will be the first LNG sent to China from anywhere in the world," he said.

"The beginning of the contract is a tribute to all involved with the North West Shelf Venture.

"China is now WA's second largest trading partner and the LNG contract will further strengthen our expanding economic relationship," he said.

Mr Carpenter also said the shipment cemented the state's position as Australia's leading exporter, with the latest trade figures putting WA's share of the nation's exports at 31.2 per cent.

Woodside's North West Shelf Ventures director, Dr Jack Hamilton, said the loading marked the official start of a 25-year trade relationship between the venture and its newest customer, Guangdong Dapeng LNG Company Ltd.

"We are excited and looking forward to safely delivering the first of many LNG cargoes to China and building on our existing business relationship and friendship with China," he said in a statement.

Mr Vaile said LNG shipments to Guangdong would extend Australia's already booming resources trade with China.

Last year, resources drove a 46 per cent increase in exports to China to $16 billion.

"Strong Chinese demand has pushed up global resources prices, helping to give Australia its most favourable terms of trade for decades," Mr Vaile said.

"We are now supplying China with increasing amounts of coal, collaborating on clean coal technology and coal mine safety."

Australia is now a major energy supplier to China, principally with coal and gas, and has recently signed a deal to supply the Asian powerhouse with uranium.

The six equal participants in the NWS Venture are Woodside Energy Ltd (operator), BHP Billiton (North West Shelf) Pty Ltd, BP Developments Australia Pty Ltd, Chevron Australia Pty Ltd, Japan Australia LNG (MIMI) Pty Ltd and Shell Development (Australia) Pty Ltd.

The China National Offshore Oil Corporation is also a member of the venture, but does not have an interest in its infrastructure.

© 2006 AAP