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Australia's Prime Minister Hails Start of Gas Deliveries to China

  • Claudia Blume

Australia's prime minister is in China to mark the first commercial shipment of Australian liquefied gas to the country. This is Australia's largest single export deal.

Australia's Prime Minister John Howard and his Chinese counterpart Wen Jiabao oversaw the opening of a new gas terminal in China's southern manufacturing hub Shenzhen on Wednesday. The Dapeng gas terminal was built to receive liquefied natural gas shipments from Australia.

The deliveries are part of a 25-year contract, worth $18 billion, for the delivery of Australian gas to energy hungry China.

John Howard hailed the contract as a symbol of the rapidly growing trade between the two countries.

"Our exports to China have quadrupled, quadrupled since 1996," he said. "This particular shipment is the largest single trade agreement that Australia has ever signed. It can, in my view, be the beginning of a further stage of expansion."

Australian exports to China increased 46 percent last year, mainly driven by sales of coal, farm products, iron ore and other resources. In April, Australia agreed to export uranium to China to fuel the country's nuclear power industry.

China is now Australia's second-largest trading partner, after Japan.

In the past few years, China has signed a number of deals with other countries to lock in supplies of fuel to keep its economy growing rapidly.

Mr. Howard and Prime Minister Wen are also expected to discuss the progress of talks to set up a bilateral free-trade agreement. Negotiations started last year. The deal would be China's first free-trade agreement with a developed country.

Mr. Howard said political issues, such as North Korea's suspected preparations to fire a long-range missile, also will be on the agenda during the meeting with Mr. Wen.

"We'll talk about, obviously, the economic relationship but I always take the opportunity when I meet the Chinese leadership to talk about issues such as North Korea, such as Iran, and generally relations in our region," he said.

Australia warned North Korea last week that firing a missile would harm its security position and urged Pyongyang to return to six-party talks on ending its nuclear weapons program.

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