BP said Tuesday that it will sign a deal worth around $20 billion to supply CNOOC with LNG, CEO Bob Dudley said at a conference in Moscow.
“It is a 20-year supply agreement on LNG. It is a fair price for them and a fair price for us. It is a good bridge between the UK and China in terms of trade,” Dudley said.
The source of LNG will likely be from BP’s U.S. export plant at Freeport, Texas, where it has 3 million tonnes per year of export capacity.
The deal is expected to boost China’s LNG intake by at least 1.5 million tonnes per year.
“After missing out on a deal to sell LNG to Taiwan last year, BP has now found a Chinese buyer for its Freeport volumes, which in pricing terms will have elements of U.S. as well as oil pricing,” an industry source said.
Last month, China sealed a 30-year piped gas supply deal with Gazprom valued around $400 billion.