BP and the China National Offshore Oil Corp. (CNOOC) announced a heads of agreement for the supply of up to 1.5 million tpy of liquefied natural gas (LNG) over 20 years starting in 2019.
The agreement was signed in London by BP's executive vice president Dev Sanyal and CNOOC chairman Wang Yilin, in the presence of UK Prime Minister David Cameron and Chinese Premier Li Keqiang.
“This is a significant deal for BP and China but it also marks a step up in global connectivity in the gas market," said Bob Dudley, CEO of BP. "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.
A full commercial contract is expected to be agreed in mid-2014. BP says it 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.
“We are pleased to support China’s commitment to improving its air quality," said Dudley. "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.”