China’s Shenzhen Energy Group has signed a long-term strategic collaboration deal with oil and gas giant BP to purchase liquefied natural gas (LNG). The world’s second-largest economy aims to bolster the development of gas power plants for energy security.
Reuters, citing the company’s statement, reported on November 26 that the deal is Shenzhen Energy’s first global long-term LNG agreement, with BP Singapore as its first supplier.
The statement did not provide details of the deal, including the period through which the contract is effective.
The Chinese energy firm said, “To meet the demand of Guangdong province and Shenzhen city for energy security and stability, Shenzhen Energy Group is making efforts to promote the construction of gas power plants.”
It added, “It is estimated that around 2024, as the gas power plants go into operation, the group’s total demand for natural gas will significantly rise.”
Reuters noted that Chinese LNG dealers are widely predicted to depend heavily on long-term supplies from Moscow this winter as they seek to prevent soaring prices in the cash market.
Regarding China’s energy imports this year, Bloomberg reported that oil behemoth Sinopec has already secured a 27-year contract valued at $60 billion to buy four million tons of LNG a year starting in 2026 from Qatar Energy.
Saad Sherida al-Kaabi, Qatar Energy’s chief executive and the Gulf state’s energy minister, commented that the bilateral agreement “marks the longest gas supply agreement in the history of the LNG industry.”