BP signs LNG supply deal with Guangzhou Gas

BP has signed a 650,000 t/yr LNG supply agreement with southern Chinese city gas firm Guangzhou Gas.

The agreement will start in 2022 and run until 2034, Guangzhou Gas said, with contract prices linked to an index of international crude prices.

Guangzhou Gas typically procures LNG on the spot market for prompt requirements, although it did issue a tender in late April for around 1mn t/yr over 10 years starting from August 2022. The tender, which closed on 9 June, was intended to secure deliveries to the firm's planned Xiaohudao import terminal in Guangdong province, which is expected to become operational in August 2022.

The buyer had signed a preliminary deal to buy 1mn t/yr from Canada's planned 2.1mn t/yr Woodfibre LNG project, which had expected to start up in 2020, but it opted not to finalise the agreement in late August 2019 amid delays to the project's start-up.

BP already has a number of supply agreements with northeast Asian firms, including Japan's Jera, Kansai Electric and China's CNOOC. But the seller's 750,000 t/yr des agreement with Taiwan's state-owned CPC is set to expire this year.

By Samuel Good