BP selected for China LNG negotiations

Petroleum News Alaska Staff

BP said March 20 that it has been selected to enter exclusive negotiations to secure the position as the foreign partner in the Guangdong project joint venture tasked to develop China’s first liquefied natural gas import terminal and associated pipeline.

Phase 1 will be a feasibility study of a re-gasification terminal in southern China near Shenzhen, conducted jointly by BP and the Chinese sponsors. Once approved, a joint venture company will be formed to construct and operate the new plant. BP said it would have a 30 percent equity state in the project.

“This is a significant new step in expanding our China operations, and an excellent strategic fit with our Asia-Pacific gas reserves,” BP chief executive Sir John Browne said.

BP said its Phase 1 investment is estimated at some $180 million.

The project includes an LNG re-gasification terminal with a capacity of 3 million metric tons a year and 300 kilometers of associated pipeline linking the terminal to the region in its first phase. It is due on stream in 2006.