BP signs agreement to supply LNG to China’s Fujian terminal; company at forefront of China’s LNG strategy

Petroleum News Alaska Staff

BP and its partners in Indonesia’s Tangguh natural gas project signed an agreement Sept. 26 to supply liquefied natural gas to China’s Fujian LNG terminal.

BP said the agreement puts it in all three legs of China’s LNG strategy.

In August, China selected Australia’s North West Shelf consortium — in which BP is an equal (16.7 per cent) shareholder — to supply 3 million tons of LNG a year to China’s first LNG terminal in Guangdong Province.

BP was also chosen last year as China’s foreign partner in the construction of the Guangdong LNG terminal and pipeline, which will access a market that is forecast to grow rapidly. Gas currently meets just 2 percent of China’s energy needs, but this is projected to increase to 7-8 percent by 2010.

BP said the 25-year LNG sales and purchase agreement signed in Jakarta between Tangguh and the China National Offshore Oil Corp. will involve the supply of up to 2.6 million tons of LNG a year to Fujian. It said that an agreement in principle for China National Offshore Oil participation in Tangguh was also signed.

Construction of the Fujian terminal is expected to start in 2004 and operations are scheduled to begin by 2007, shortly after completion of the Guangdong terminal.