BP in talks with Chinese oil groups to step up LNG supplies
BP is in talks with three of the largest oil groups in China about increasing its sales of LNG in the country. The oil and gas major has been talking to PetroChina, CNOOC and Sinopec, executives said this week.
The extra supply will go to the three LNG terminals that the country’s largest oil company, PetroChina, plans to build in the provinces of Jiangsu, Hebei and Liaoning. “PetroChina is actively seeking an LNG supply for their terminals,” said Dan Westbrook, head of gas, power and upstream in China. “We would like to grow in LNG and other sectors in China. The entire spectrum is of interest to us. We are looking at investing in downstream, refining and upstream.”
The UK group owns 30% interest of CNOOC’s terminal and pipeline in the southern Guangdong province. The 3.7 million tonnes per annum project, due to open next year, will be China’s first regasification terminal and the first step towards a major expansion of LNG consumption in the Far East.
China last year selected Australia’s North West Shelf consortium - in which BP is an equal one sixth shareholder - to supply three million tonnes of LNG a year to Guangdong. BP is also the operator and largest shareholder in Indonesia’s Tangguh gas field. In September 2002, Tangguh signed a supply contract for China’s second LNG import terminal in Fujian, with sales beginning in 2007 to the 2.6 mtpa plant. In each of these developments, BP is a partner with CNOOC. BP expects ten LNG terminals to be built by 2010 out of 20 planned.
The group is building on it position as one of the leading foreign oil and gas companies operating in China with investments of $3 billion and an additional $500 million planned this year. Approximately 40% is in LNG, 40% in chemicals and the rest in downstream products.
BP also has six liquefied petroleum gas joint ventures in southern and eastern China and other plans for more than 1,000 joint venture petrol stations. Gas demand of 34 Gm3 in 2003 met 2% of China’s energy needs, but this is projected to increase to between 7% and 8% by 2010.
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