Society

Energy giant PetroChina Co Ltd has pulled out of a $40 billion deal to buy natural gas from a project off Australia, but Chinese analysts and officials Tuesday tried to play down the impact on the Chinese market or bilateral relations.

Australia's second largest oil and gas producer Woodside Petroleum Ltd informed Australia's stock exchange on Monday that an early stage agreement for the Browse Basin liquefied natural gas (LNG) project off Western Australia state had not been settled by a Dec 31 deadline and had now lapsed.

Under the September 2007 agreement, PetroChina would have potentially bought up to 3.3 million tons of LNG per year for up to 20 years.

At the time, it was one of Australia's largest export deals worth an estimated A$45 billion ($40 billion).

"I don't think it will hurt the domestic market. The growth momentum in China's natural gas market will continue," Dong Xiucheng, professor at China University of Petroleum, said Tuesday.

Foreign Ministry spokeswoman Jiang Yu said she was not aware of the specifics of the issue, but stressed that the economies of China and Australia are complementary, and promoting trade and investment serves the common interest of both countries.

PetroChina said last night that a delay in the development of the Browse project was the major reason behind the lapse of the deal.

Some analysts also said it was probably because PetroChina had become dissatisfied with the cost in the two years since the deal was signed.

The lapse of the deal means that the terms, including price, for a large chunk of Browse Basin gas are once again fully open to negotiation.

"The deal was good at the time, but in the past two years, things have been changing rapidly," said Peter Kopetz, energy analyst with Western Australia-based State One Stockbroking.

Natural gas prices peaked in the middle of 2008, but have been on a decline since then, tumbling more than 50 percent.

PetroChina would probably look for other sources of gas, said Yang Wei, an oil industry analyst at Guotai Junan Securities in Shanghai.

"I think it's probably because the price is not right. It's too high," he said.

Woodside and PetroChina "have agreed to keep each other informed of progress in their respective LNG export and import projects," Yvonne Ball, the Australian company's spokeswoman, told China Daily Tuesday.

China is a leading LNG importer, but the country should diversify its import sources to find more sustainable supplies, analysts said.

At least 51 children in East China's Jiangsu province were found to have excessive levels of lead in their blood, the latest lead poisoning scandal after a string of such cases last year, sounding new alarms for heavy metal pollution in China.

Medical checks for 110 children younger than 16 in Dafeng, Jiangsu, showed 51 tested positive for high lead levels, said Dafeng's municipal government on its website yesterday. 

Dafeng Shengxiang Power Supply Co Ltd, a lead-acid battery manufacturer, was held responsible for the poisoning. The company is located less than 100 meters away from the Hekou village where residents started to complain of anorexia and vomiting among their children since August last year. The company has been ordered to stop production and relocate.

Local authorities said they will step up screening and launch free health checks for all children younger than 16, send those diagnosed with high lead levels to Shanghai for medical treatment, and provide guidance for the nutrition of children with lower lead levels to remove the toxin.

But such promises failed to appease angry villagers.

A villager cries over his grandchild's suffering from lead poisoning in this recent photo.

A 50-year-old journalist has been sentenced to 16 years in jail for taking bribes to cover up a mine disaster in Hebei province in July 2008.

Li Junqi, former director of the Hebei bureau of Farmers' Daily, is believed to be the first of the 10 reporters involved in the scandal to receive criminal punishment.

Thirty-four miners and a rescuer died after a blast ripped through the Lijiawa mine in Yuxian county on July 14, 2008, three weeks before the start of the Beijing Olympics.

According to local media reports, mine bosses relocated bodies, destroyed evidence and paid the journalists 2.6 million yuan ($380,000) to cover up the disaster, keeping the tragedy from appearing in newspapers for 85 days.

Following a State Council probe into the accident, the 10 journalists confessed to taking bribes, resulting in the prosecution of 48 local officials.

The identities of the 10 journalists have not been made public, but reports claim Guan Jian, a Beijing journalist from China Internet Weekly, and Li were among them.

While pundits pondered whether President Barack Obama, on his first trip to China, had been out maneuvered by President Hu Jintao or whether he had achieved his objectives with quiet diplomacy, a bigger, underreported, story was developing. China's leaders have recognized that for the Communist Party to retain its status as China's ruling party it must elevate its commitment to learning and innovation. Although previous generations of China’s senior leaders have emphasized learning, it now has been made prime Party policy--which will likely present a significant challenge to America's economic competitiveness.

Recently I sat down with Politburo Member and rising star in Chinese politics, Li Yuanchao, a champion of the learning-minded policy. A longtime colleague of China’s President Hu Jintao, Li is currently head of the Party's powerful Organization Department, which appoints and trains senior officials in government and executives in state-owned enterprises, a critical function in government and the economy. Li has pioneered new mechanisms for training and oversight of officials and executives, and has enhanced transparency in the process of governance in order to better serve the public interest.