(EnergyAsia, June 19 2014, Thursday) — BP said it has signed an agreement for the annual supply of up to 1.5 million tonnes of liquefied natural gas (LNG) to China National Offshore Oil Corporation (CNOOC) over 20 years starting 2019.
In London this week, BP’s executive vice president, Dev Sanyal, and CNOOC chairman, Wang Yilin, signed the agreement in the presence of UK Prime Minister David Cameron and Chinese Premier Li Keqiang.
The UK major said it expects a full commercial contract to be agreed in mid-2014. It plans to supply LNG from its global portfolio using its own tanker fleet and chartered ships to make deliveries to several import terminals in China.
The BP-CNOOC deal is worth around US$20 billion, adding to China’s record-breaking US$400 billion agreement signed with Russia last month.
Bob Dudley, BP’s group chief executive, said: “This is a significant deal for BP and China but it also marks a step up in global connectivity in the gas market. This is important for all countries and regions looking at the diversity of energy supply and energy security – it gives BP greater flexibility to respond to the changing energy demands from Europe, Asia and other regions.
“We are pleased to support China’s commitment to improving its air quality. This agreement is the first long-term LNG supply deal wih China where BP is the sole supplier and it should play a crucial role in enhancing China’s energy diversification and supporting its economic growth.”
CNOOC, the world’s third largest LNG importer, took in 13 million tons of the fuel last year. The state-owned firm owns and operates six LNG receiving terminals in Guangdong, Fujian, Zhejiang, Shanghai and Tianjin, and is building and planning several more.
BP is active in many of the world’s major LNG producing and consuming regions. It has stakes in LNG projects in Australia, UAE, Indonesia, Egypt, Trinidad and Angola.