The multibillion-dollar deal between BP and China to supply liquefied gas (LNG), to the China National Offshore Oil Corporation, (CNOOC), has been reached. BP has been supplying LNG to CNOOC from Indonesia since a long-standing agreement. The $20-billion-dollar supply agreement will be formally announced today by UK Prime Minister David Cameron during Chinese Premier Ki Kegiang’s 3-day state visit. The two nations are likely to sign deals worth more than $30 million during the trip. China’s Ambassador in London Liu Xiaoming said that the UK and China would sign more than 40 deals between governments and businesses covering many sectors including investment, energy and cultural cooperation. It is rare to find long-term agreements today. Analysts were shocked at how short the agreement lasted. As importers anticipate new supply in the next years, it is becoming more difficult to find agreements lasting at least 20 years. Bob Dudley from BP, the CEO, stated that it is a 20-year supply arrangement on LNG. They are paying a fair price and we pay a fair amount. This agreement is an excellent bridge between China and the UK in terms of trade. BP today will sign an agreement in accordance with CNOOC. British oil and gas company could also have access to LNG from Angola, Egypt, Angola, Trinidad, and Angola. In Australia, two new export facilities are expected to be operational within the next few years. China is now a significant US customer. According to Reuters sources the deal will boost Chinese LNG imports by 1.5+mtpa (approx. 26 Cargoes will make China an important customer of American natural gas. US natural gas is expected to soon travel via pipelines from the US Gulf Coast to be liquefied at Gulf Coast facilities before being shipped overseas in tanks. China is one of the biggest beneficiaries of US natural gas at a low price. China is being courted by producers In May 2014,, the Russian and Chinese leaders signed a $400 trillion natural gas agreement in which China would receive 38 billion cubes of Russian gas every year for the period of 30years. It will begin in 2018.. Rising import costs are a problem for South Korea and Japan which have two of the largest LNG purchases in the world. China is now a key target as its energy needs are expected to rise faster than the two other importers. As Beijing seeks to cut carbon emissions, LNG can be a great fuel. China is seeing an increasing number of cities struggling to deal with the rising levels of pollution. China’s primary energy source is coal. This is why there are high levels of pollution. China has made pollution control a priority of its latest economic policy statement. The Chinese demand for natural gas is expected to rise to 420 trillion cubic meters annually by the end this decade. LNG will be a significant part of China’s natural gas imports. China and the UK are expected to sign deals worth $30bn (PS18bn). What exactly is LNG or liquefied natural gaz? LNG stands for liquefied natural gaz. LNG is non-toxic, colorless and clear liquid formed by natural gas being cooled down to (minus) oF oC. The natural gas shrinks 600 in volume when it is chilled and liquefied. This makes it easier to transport and store to cities and towns around the world. Globally, natural gas is a significant source of energy. Many cities and towns require natural gas are located far from these fields. Regasification plants turn LNG back into natural gas once it reaches its destination. The LNG is transported via pipes to businesses and homes. Video: What exactly is LNG?
Multibillion-dollar deal between BP and China
