UPDATE 2-Qatar in LNG deal with PetroChina, CNOOC

(adds Shell executive comment)

By Emma Graham-Harrison and Chen Aizhu

BEIJING, April 10 (Reuters) - Top LNG exporter Qatar signed on Thursday two landmark deals to sell liquefied natural gas to Chinese oil giants PetroChina (PTR.N) and CNOOC (0883.HK), its first such sales to the world's second-biggest energy consumer.

Qatargas will sell 2 million tonnes a year of LNG to CNOOC, currently China's sole LNG importer, starting from 2009, according to a Heads of Agreement the two signed in Beijing.

Qatargas, together with parter Royal Dutch Shell (RDSa.L), agreed to sell 3 million tonnes of LNG a year to PetroChina from 2011 for 25 years, formalising a deal that the Chinese firm announced several weeks ago.

A tightening global market for the clean fuel and rapidly expanding domestic demand has forced China to agree to current international prices, that are much higher than about five years ago when it clinched its first supply pact.

LNG prices in long-term contracts are typically linked to oil which is at record highs. The global LNG market is tight due to rising demand in Asia and delays at production projects.

Linda Cook, Shell's Executive Director for Gas & Power, said the shift in market fundamentals has also led China to drop its request for an equity in the suppliers' upstream operations, a guideline Beijing used to hold in securing the long-term gas.

"We no longer see offering equity a neccesary component to attract customers to the table for negotiation," Cook told a small group of reporters over phone.

"Today we find ourselves in a market fairly well balanced if not somewhat tight. Because of that, we see pricing at levels we will naturally expect," she said, adding that Shell was happy with the prices agreed with PetroChina.

Qatar was among the first bidders to supply China's first LNG terminal, operated by CNOOC, in Shenzhen city of southern province of Guangdong, but lost out to Australia.

The gas supply to PetroChina signed on Thursday will be from the Qatargas 4 project for the Chinese firm's planned receiving terminals, companies said in a joint statement.

PetroChina, which last September agreed with Australia for two supply agreements potentially worth $50 billion, has started building one receiving terminal in northeast Liaoning and another one in eastern Jiangsu province.

The Qatargas 4 project is due to bring on line 7.8 million tonnes of the super-cooled natural gas in 2010.

State-run Qatar Petroleum owns 70 precent of the project, while Shell owns the rest. The bulk of the exports had been earmarked for export to the United States.

The supply to CNOOC will come from Qatargas 2 project, said the Qatari minister.