BP, CNOOC Sign 20 Year LNG Deal

BP and the China National Offshore Oil Corporation (CNOOC) on Tuesday 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.

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.

CNOOC is 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.