Fed: Price will determine China LNG contract: Vaile

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Fed: Price will determine China LNG contract: Vaile

CANBERRA, April 16 AAP - Price rather than political pressure would ultimately determineAustralia's chance of winning a multi-billion liquified natural gas (LNG) bid in China,Trade Minister Mark Vaile said today.

Mr Vaile said after talks with Chinese officials, he still believed price would bethe final factor in the decision.

Prime Minister John Howard heads to China next month to push Australia's chances ofwinning the $750 million a year LNG contract.

Australia, which would supply the LNG from the North West Shelf, is competing againsttwo other countries for the lucrative contract.

Mr Vaile, who was in China last week, said more countries were looking to energy sourcessuch as LNG because of the volatility in world oil markets.

While Australia had a long trade history with China, and had backed the country's membershipof the World Trade Organisation (WTO), price would be the biggest factor in the LNG decision.

"At the end of this process, there is going to be a significant amount of emphasisplaced on price," he told reporters today.

"When the Chinese government ultimately gets to make their final decision ... it'llcome down to the merits of the bid, and primarily based on the commercial aspect of it.

"The message still is very clearly that the Australian companies have to be in therecompeting hard all the way to the line."

Mr Vaile said he had sold the merits of Australia's bid, highlighting the safe andsecure supply it could offer.

He said he had also focused on Australia's links to China, including its successfulbid to join the WTO.

A decision is expected in late May.

AAP sw/daw/las

KEYWORD: LNG