Talisman Energy Inc, a Canadian oil company spun off from BP Plc, is suing China's CNOOC Ltd over a stake in a US$5 billion liquefied natural gas venture in Indonesia, court papers in the United States report.

Talisman's Fortuna Resources (Sunda) Ltd unit is claiming the right to 44 percent of CNOOC's 17 percent interest in the Tangguh development, according to filings in a Texas court. Fortuna doesn't have the right to share in the project, and if the court disagrees, Fortuna's interest would be no more than 5.4 percent, CNOOC claims in its filings.

Tangguh, led by BP, will expand China's LNG supplies by about 75 percent. Prices of the fuel have more than doubled in three years, boosting profits for producers as Asian countries increase imports to cut reliance on oil and coal. Global LNG demand is forecast to double by the middle of the next decade.

"Buyers are taking as much as the sellers can supply," Niu Li, an economist at China's State Information Center, told Bloomberg News. "China's demand for LNG is huge."

LNG is natural gas that has been chilled to a liquid for transportation by ship to destinations not connected by pipeline. On arrival, it is turned back into gas for distribution to power plants, factories and households. Global demand for the fuel may jump by 200 million metric tons a year, or more than double, by 2015 compared with 2006, according to Purvin & Gertz Inc, a Houston, Texas-based energy consulting firm.

CNOOC spokesman Xiao Zongwei, based in Beijing, declined to comment. The company in its 2006 annual report said it is being sued for a stake in the Tangguh project, without identifying the plaintiff. The case is scheduled to be tried in November, the annual report said.

Talisman's Christopher J. The project is scheduled to begin operations in 2008 as planned, regardless of the suit, BP, which holds a 37.2 percent stake in Tangguh, said in a May 28 e-mailed response to questions.

China National Offshore Oil Corp, CNOOC's parent, has a 25-year accord to buy 2.6 million tons of LNG from Tangguh. The Tangguh project will initially have a capacity of 7.6 million metric tons a year.

The dispute originated in 1968, when Warrior International Corp entered into an agreement with Independent Indonesian American Petroleum Co and Carver Dodge International Co, the court document said.

A section of the accord contains an "area of mutual interest clause," Fortuna's complaint said. The clause provides that if a partner acquires any exploration interests in Indonesia, "it must offer the other parties" a participating share, according to the document.

Warrior International merged in 1984 with Warrior Oil Co, which was acquired by Paladin Resources Plc in 1999. In 2005, Paladin Resources was bought by Talisman. Paladin Resources (Sunda) Ltd then changed its name to Fortuna Resources (Sunda) Ltd.