China’s power generation firm Shenzhen Energy said it had signed a long-term deal to buy liquefied natural gas (LNG) from a unit of energy giant BP.
According to a statement by Shenzhen Energy, it agreed the deal with BP Singapore during an online ceremony on November 24.
This SPA is the first long-term contract between the two firms and also Shenzhen Energy’s first long-term international LNG purchase agreement, it said.
Shenzhen Energy did not disclose the duration of the contract or the volumes it would buy.
The Chinese firm said it is promoting the construction of new gas-fired power plants to meet the demand of the Guangdong province and Shenzhen city.
Shenzhen Energy expects its natural gas demand to rise “significantly” once these gas-fired power plants come online in 2024, it said.
BP and the power firm are already cooperating via the Guangdong Dapeng LNG terminal in Shenzhen.
Last year, BP started to directly supply customers in China with regasified LNG from the terminal where it has a 30 percent stake.
This is the first time that BP has created a fully integrated gas value chain into China, directly connecting upstream resources, transportation and trading with downstream gas customers.
BP also signed at least three Chinese LNG supply agreements last year. These include deals with Guangzhou Development Group, Shenzhen Gas, and China’s State Power Investment Corporation (SPIC).