BP signs 10-year deal of pipeline gas with Shenzhen Gas
02:34, 22 October 2021
BP has signed a 10-year gas sales and purchase agreement with Shenzhen Sino-Benny LPG Co, a wholly-owned subsidiary of Shenzhen Gas Group Co to support China’s growing energy needs, the company said in a statement.
Under the agreement, BP will provide Sino-Benny with up to 300,000 tonnes a year of pipeline gas in Shenzen starting 2023. The deal is the first long-term agreement with price indexed to international liquefied natural gas (LNG) in China’s domestic gas market.
The pipeline gas in Shenzen is part of Guangdong-Hong Kong-Macao Greater Bay Area. The gas will be supplied through the LNG receiving terminal of Guangdong Dapeng LNG Company Limited (GDLNG) which BP has a 30% stake in. GDLNG is China’s first pilot LNG import and regasification terminal.
Robust demand
In its 2020 Energy Outlook, BP estimated the global demand for gas grows relatively robustly over the next 15 years or so, driven primarily by China, India, and other developing Asia countries as they switch from coal towards lower carbon fuels. China has pledged to achieve carbon neutrality by 2060.
Consulting firm Wood Mackenzie expects China’s gas demand to grow at 5.5% a year on average between 2020 and 2030. Growth will decelerate after 2030, but by 2050 China’s gas demand could reach around 660 billion cubic metres.
Wood Mackenzie expects China to import more gas to bridge the gap between demand and domestic output.
Read more: China’s ENN signs 13-year LNG deal with Cheniere Energy
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