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Deal covers 1.5 million tonnes
BP and the China National Offshore Oil Corporation (CNOOC) today announced a heads of agreement for the supply of up to 1.5 million tonnes of liquefied natural gas (LNG) per year over 20 years starting in 2019. The agreement was signed in London by BP Executive Vice President, Dev Sanyal and CNOOC Chairman, Wang Yilin, in the presence of UK Prime Minister David Cameron and Chinese Premier, Li Keqiang.
Bob Dudley, BP 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.”
A full commercial contract is expected to be agreed in mid-2014. BP would expect to supply LNG from its global portfolio, using its own LNG tanker fleet and chartered ships delivering gas to a number of terminals in China.
Overview:
– 1.5 million tonnes of LNG is approx 72 billion cu ft of natural gas.
– CNOOC is a pioneer of China’s LNG industry and the third largest LNG importer in the world with 13 million tons of LNG imported in 2013. Currently, CNOOC operates 6 LNG receiving terminals in Guangdong, Fujian, Zhejiang, Shanghai and Tianjin with further terminals under construction.
– BP is active in many of the major LNG producing regions as well as in the main LNG markets. It is involved in LNG projects in Australia, UAE, Indonesia, Egypt, Trinidad and Angola.
