-- China National Offshore Oil Corp., operator of the country's first liquefied natural gas terminal, signed a 25-year LNG supply agreement with Qatar after an initial accord reached two months ago.

China National Offshore, the parent of Hong Kong-listed Cnooc Ltd., will buy 2 million metric tons of LNG a year from Qatargas Operating Co., according to the agreement signed yesterday. The fuel will be shipped to LNG terminals owned by China National Offshore, said the nation's largest offshore oil producer in an e-mailed statement today.

Domestic oil companies led by state-owned China National Offshore are planning more than 10 LNG terminals on the eastern coast to meet a government target of doubling the use of the cleaner-burning fuel by 2010. Yesterday's accord coincided with Chinese Vice President Xi Jinping's first state visit to Qatar.

PetroChina Co., the country's biggest oil producer, will receive 3 million metric tons annually for 25 years from the Qatargas 4 Project, which is 30 percent owned by Royal Dutch Shell Plc, the companies said in a joint statement in April. China National Offshore will get 2 million tons annually from 2009, according to a separate statement released at the time.

China National Offshore agreed to buy as much as 1 million metric tons of LNG a year from Total SA, the Beijing-based oil producer said on June 16. Cnooc's parent will start taking delivery of the fuel from 2010, it said then.

LNG is natural gas that has been chilled to liquid form, reducing it to one-six-hundredth of its original volume, for transportation by ship to destinations not connected by pipeline. It's turned back into gas for distribution to power plants and other buyers. LNG pricing formulas linked to the Japanese Crude Cocktail may include a floor and a ceiling to manage price volatility.