BP and China Huadian corporation sign multibillion dollar LNG deal

LNG agreement signed during State Visit to UK

BP and China Huadian Corporation (Huadian) today signed a sale and purchase agreement for BP to sell Huadian up to 1 million tonnes of liquefied natural gas (LNG) per year worth up to $10 billion over the next 20 years. 

The agreement was one of several signed in London during this week’s State Visit to the UK by the President of The People’s Republic of China, Mr Xi Jinping and signed in the presence of President Xi and UK Prime Minister David Cameron.

“This marks another long-term LNG supply deal between BP and Chinese buyers and it will play an important role in enhancing China’s energy diversification and supporting its economic growth,” said Bob Dudley, BP Group Chief Executive. “Not only does it strengthen China’s connections to BP and the UK as global trading partners, it also supports China’s commitment to improving its air quality and reducing its emissions through the use of lower carbon fuels.” 

The agreement with Huadian was one of a number of new agreements with Chinese firms, adding several billion dollars in future trade to the BP’s already significant business with China and underscoring the important and growing trade links between the UK and China.

“BP has been committed to doing business in China for more than 40 years and we’re pleased to enter into an agreement that supports continued diversification and growth of the Chinese economy,” Dudley said. “This agreement also strengthens the connectivity of global gas markets, which is important for countries seeking more diverse and secure energy supplies.”

Huadian is one of the five largest state-owned power generation companies in China and the country’s largest gas-fired power generator.

“This agreement is not only in line with the common objectives of our companies, but it also matches the energy policies of China and the UK,” said Li Qingkui, Chairman of Huadian. “Lower carbon power generation is part of Huadian’s mission to bring greater value to the economy and society while growing ‘Green Huadian’ into a world-class energy group. We look forward to further cooperation with BP in the near future and actively contributing to energy security and a cleaner energy future.”

“We expect China’s energy production to rise 47 percent and its consumption to grow 60 percent by 2035, making it the world’s largest energy importer,” said Edward Yang President of BP China. “This agreement with Huadian further demonstrates BP’s long term commitment to helping China diversify its energy supply and improve air quality. We are pleased to serve as China’s trusted energy partner, now and in the future.” 

Further information about BP China is available on www.bp.com.cn

Further information

Contacts

BP press office, London: +44 (0)20 7496 4076, bppress@bp.com

BP press office, China: +86 (0)10 6589 3878, bpchinapress@bp.com

Notes to editors

• BP has been operating in China since the early 1970s. With an accumulated investment of current operations around US$ 4.5 billion by the end of March 2015, BP is one of the leading foreign investors in the Chinese oil and gas sector. BP’s business activities in China include petrochemicals manufacturing and marketing, aviation fuel supply, oil product and lubricant retailing, LNG terminal and pipelines and the chemical technology licensing. Building on its business successes in China, BP has also expanded partnership relations with the Chinese national energy companies beyond the country’s borders.
• In an expansion of its ongoing global partnership with China National Petroleum Corporation (CNPC), BP and CNPC today also entered into a strategic global partnership covering potential shale gas exploration and production in the Sichuan Basin. The companies have also agreed to cooperate on future fuel retailing ventures in China. In addition to these Chinese agreements, BP and CNPC have agreed to explore new trading opportunities globally and also to share knowledge around technology and management practices. Both companies are partners in the operation of the Rumaila oil field project in Iraq and see this as a model for future global cooperation.

Cautionary Statement

This press release contains certain forward-looking statements concerning BP's expectations regarding a sale and purchase agreement to supply Huadian with up to 1 million tonnes of LNG, including the expected role the agreement will play in energy diversification and economic growth in China and its impact on BP’s future trade in China; plans and expectations regarding future cooperation with Huadian, and expectations regarding energy production and consumption in China. Actual results may differ from those expressed in such statements, depending on a variety of factors including the receipt of relevant third-party and/or regulatory approvals; future levels of industry product supply; demand and pricing; OPEC quota restrictions; PSA effects; operational problems; regulatory or legal actions; economic and financial conditions generally or in various countries and regions; political stability and economic growth in relevant areas of the world; changes in laws and governmental regulations; exchange rate fluctuations; the success or otherwise of partnering; the actions of competitors, trading partners and others; natural disasters and adverse weather conditions; changes in public expectations and other changes to business conditions; wars and acts of terrorism, cyber-attacks or sabotage; and other factors discussed under “Principal risks and uncertainties” in our Stock Exchange Announcement for the period ended 30 June 2015 and under "Risk factors" in our 2014 Annual Report and Form 20-F 2014.