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Australia’s Icon Energy signs 20 year LNG sales agreement with Shantou SinoEnergy

Oilfield Technology,

Icon Energy Ltd has signed a binding LNG Sales Agreement with Shantou Sinogas Energy Co., Ltd in Shantou City in Guangdong Province in China to supply 40 million tonnes of LNG over 20 years. The first cargo is expected to be delivered by 30 June 2016.

Shantou SinoEnergy is also planning to build a US$ 727 million receiving terminal and regasification facility on Nan’ao Island near Shantou. Shantou SinoEnergy is also looking to create a joint venture with China Guodian Corporation to build its Shantou LNG Receiving Terminal Project as a joint venture partner. Guodian is a Government owned corporation with an asset backing in excess of US$ 90 billion and is one of China’s largest electric power generators.

The Nan’ao Island LNG terminal is aimed at meeting the energy demands of a rapidly growing industrial and residential market, as well as the future construction of gas fired power plants to be operated by China Guodian Corporation in eastern Guangdong Province.

The supply terms give Icon Energy flexibility to supplement its own resources with suitable contracted third party feedstock gas, which could serve to unlock stranded gas in Queensland and elsewhere.

Icon Energy Managing Director, Ray James said, “I envisage commencing discussions with identified and prospective co-venturers in the next couple of months, with a view to building Icon Energy’s gas bank.”

The company plans to commence drilling in the Surat Basin ATP626P tenement in mid-April this year. A Chinese delegation consisting of Shantou SinoEnergy and China Guodian Corporation staff and relevant Chinese government officers will visit Icon’s offices on the Gold Coast and its field operations in Queensland during May 2011.

“Following our operations in the Surat Basin, where we have a contract to drill up to five wells, we will be looking to commence drilling in the Cooper-Eromanga Basin ATP855P tenement around June or July and thereafter in our Gippsland PEP170 tenement. The recent Queensland floods are still affecting operations in the Cooper-Eromanga Basin,” said Mr James.

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