China’s Shenzhen Energy Group has signed a long-term agreement with oil major BP to buy liquefied natural gas (LNG), aiming to lock in supplies with gas-fired power generation poised to surge in the world’s second-largest economy.
The agreement is Shenzhen Energy’s first long-term international LNG contract and its first long-term contract with BP Singapore, the Chinese company said in a statement on Friday.
The statement did not specify details of the agreement, including the duration of the contract.
“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 said.
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.”
China’s LNG importers are widely expected this winter to avoid the spot market, where prices have risen sharply, relying instead on Russian supplies and long-term contracted volumes.
QatarEnergy has signed a 27-year deal to supply LNG to China’s Sinopec in the longest such agreement to date, as volatility drives buyers to seek long-term supplies.