Regional LNG: BP, CNOOC sign 20-year LNG supply deal
Wednesday, June 18 2014 - 01:50 AM WIB
China National Offshore Oil Corporation (CNOOC) announced late Tuesday that it had signed a 20-year deal with UK-based oil giant BP for liquefied natural gas (LNG) supply.
According to the heads of agreement signed by the parties, BP is to supply up to 1.5 million tons per annum (mtpa) of LNG from its global portfolio to CNOOC over 20 years starting in 2019, said CNOOC in a statement.
The parties expect to reach a full commercial contract in mid-2014, it added.
Under the witness of Chinese Premier Li Keqiang and British Prime Minister David Cameron, Chairman of CNOOC Wang Yilin, and EVP of BP Dev Sanyal, signed the agreement, it said.
"The agreement with BP will not only deepen the cooperation between both parties, but also further diversify the LNG supply of CNOOC," the statement quoted CNOOC Chairman Wang Yilin as saying.
"CNOOC will continuously strive to acquire competitive natural gas resources around the world, and to make positive contribution to securing clean energy supply as well as protecting ecological environment of China," Wang added.
CNOOC and BP have built sound relationship throughout the LNG value chain since 2001. In its statement, CNOOC hailed the deal as a "new milestone" in the cooperation between the parties.
CNOOC imported more than 13 million tons of LNG, accounting for 72 percent of the country's total LNG import, in 2013.
By the end of May 2014, CNOOC had built and put six LNG receiving terminals into operation in Guangdong, Fujian, Shanghai, Zhejiang, Zhuhai and Tianjin respectively, with a total LNG receiving capacity of 24.8 mtpa.
Meanwhile, the Hainan, Shenzhen, Yuedong LNG receiving terminals are under construction and will be commissioned before the end of 2015, CNOOC said.
The CNOOC statement did not say the value of the deal, but earlier reports quoting BP CEO Bob Dudley said that the LNG supply deal is worth about US$20 billion. BP already supplies LNG to China from its LNG plant in Papua, Indonesia.
Editing by Reiner Simanjuntak