1 1  and transportation

2 2 Environmental Issues

3 3 China and the Environment  China approved the Kyoto Protocol on 30 August  Pollution levels: Total Suspended Particulates Paris – 14 Beijing – 377 Sydney – 54 Shanghai – 246 Kuala Lumpur – 85Urumqi – 515 Bangkok – 223 Taiyuan – 568 Jakarta – 271 Lanzhou – 732 and it results in this:

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6 6 GD LNG – Project Background Guangdong Province  Population of over 75 million  10-15% growth per year for the last years  Contributes about 10% of China’s GDP  Contributes about 38% of China’s total exports

7 7 GD LNG – Project Background Project being developed in two phases Phase 1: Regasification terminal and 300km of transmission pipeline in Guangdong and branch lines to Hong Kong Phase 2: additional 2MMTPA volume and extension of trunkline around western side of Pearl River Delta Imports scheduled to commence in 2005

8 8 GD LNG – Project Background  Feasibility Study Report to be submitted to the SDPC later this year  If FSR approved, JV Company will be formed

9 9 GD LNG – Project Background ownership CNOOC 33% Shenzhen Investment Holding14% Guangdong Yuedian Power Assets 6% Guangzhou Gas 6% Dongguan Fuel Industrial 2.5% Foshan Municipal Gas 2.5% Hongkong Electric 3% Hong Kong & China Gas 3% BP30%

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11 GD LNG: Demand Side Phase I: 11 customers (~3.28 MMTPA): HK Buyers (0.80 MMTPA) HongKong Electric (6 x 300 MW) Hong Kong & China Gas PRC power generators (1.62 MMTPA) Dongbu (3 x 350 MW) Huizhou (3 x 350 MW) Qianwan (3 x 350 MW) Meishi (Oil-to-Gas Conversion) PRC towngas (0.86 MMTPA) Dongguan, Foshan, Guangzhou, Nanhai, Shenzhen

12 GD LNG: Demand Side Phase II Increased take by Phase I customers City gas customers on the east bank of the Pearl River Delta e.g. Zhuhai, Zhongshan, Jiangmen and Heshan Additional oil-to-gas conversion power plants

13 GD LNG: Supply Side  Supplier is Australia LNG  25 year contract worth around US$13 billion  3 MMTPA from NWS 4 th train

14 GD LNG: Supply Side Australia LNG

15 GD LNG: Supply Side  CNOOC Ltd will acquire equity interest in the NWS  Creation of China LNG Joint Venture Will own the LNG supplied to Guangdong, and associated condensates and LPGs CNOOC Ltd offered 25% interest Price of around US$320 million plus tariff for access to NWS infrastructure

China LNG CNOOC LTDNWS Partners China LNG JV 25%75% WoodsideShellMIMIChevronBPBHP 12½% each

17 GDLNG: Shipping  2-3, 145,000 cu.m vessels  Vessels to be owned: COSCO & China Merchants40% NWS39% Chinese owners21%  Ship management company to be established: COSCO & China Merchants60% NWS40%

GDLNG: Shipping Cosco China Merchants CCM JV C o Chinese Owners NWS Vessels 21% Shipbuilders Ship Management C o Hudong Zhonghua Chantiers de l'Atlantique 39% 40% 60%

19 GDLNG: Project Issues Land Consents LNG Supply and Shipping Downstream Gas Sales Construction Financing

20 Future LNG Prospects Guangdong Phase II Fujian Zhejiang? Shanghai? Jiangsu? Shandong?

Thank You