China National Offshore Oil Corp (CNOOC) said yesterday it had drawn up a shortlist of three potential gas suppliers for China's first liquefied natural gas (LNG) terminal.

Australia LNG Pty Ltd, BP Gas in Indonesia and Qatar's Ras Laffan Co were selected to negotiate a gas supply contract for the LNG terminal, said an official with the Guangdong LNG Joint Executive Office based in southern Chinese city of Shekou.

"We will soon start negotiations with the three shortlisted companies and hope to nail down the final candidate(s) around the middle of this year before we complete the feasibility studies," the official told Reuters by telephone.

A CNOOC-led Chinese consortium and BP are slated to build by 2006 a three million tonne per year LNG import terminal in Shekou, Guangdong province at a cost of $616 million.

The supply contract would last for at least 20 years, he said.

According to the preliminary feasibility studies, growth in the Chinese gas market may lead to the terminal's expansion to about eight million tpy by 2008.

CNOOC, the terminal's leading stake holder with 33 per cent, issued in November a tender for the supply contract to companies from six countries-Australia, Indonesia, Malaysia, Qatar, Russia and Yemen.