Bp selected for exclusive negotiations to finalize participation in china's first lng import scheme
1. BP Selected For Exclusive Negotiations To
Finalize Participation In China's First LNG
Import Scheme
2. BP announced today that it has been selected to enter exclusive negotiations
to secure the position as the foreign partner in the JV tasked to develop
China's first liquefied natural gas (LNG) import terminal and associated
pipeline. The Chinese sponsors and BP will jointly conduct a Feasibility Study
which, once approved by Chinese authorities, will lead to the formation of a
JV company responsible for the construction and initial operating phase of
the new plant.The Guangdong project in southern China will consist of an LNG
re-gassification terminal near the city of Shenzhen, with a capacity of three
million tonnes a year, together with 300 km of associated pipeline linking the
terminal to the region in its first phase. It is due on stream in 2006.
A successful finalisation of the negotiations will lead to BP taking a 30%
equity stake in the project, partnering with a coalition led by the China
National Offshore Oil Corporation (CNOOC) (33%), local Guangdong
companies (31%) and two Hong Kong energy companies (6%).
"This is a significant new step in expanding our China operations, and an
excellent strategic fit with our Asia-Pacific gas reserves,” BP chief executive Sir
John Browne said.
3. "The Guangdong project will cement our position as a leading global partner
for China's rapidly growing gas markets and provides a platform for further
growth for the BP Group in the province of Guangdong. China is the world's
largest energy market outside the U.S. with a market expanding with
continued economic deregulation. As China moves to cleaner fuels, gas
demand will increase more rapidly still, and we now have the strongest
possible access to the markets being created by that growth.”
BP's Phase one investment is estimated at some $180 million. An anticipated
Phase two expansion is envisaged, to be on stream in 2008. This will add a
further 2 million tonnes a year of LNG re-gassification capacity and 180 more
kilometres of pipeline.Gas currently meets just 2% of China's energy needs,
but this number is projected to increase to between 7 and 8% by 2010.
Notes:
BP is one of the world's largest energy and petrochemicals groups and has so
far invested over U.S.$3 billion in China. To date, BP employs over 700 people
in China and is involved in joint ventures that employ over 2,200. BP has a
wide range of existing investment and business activities in China, working
with the country's three major integrated oil companies.
4. In March 2000, BP acquired a 2.2% equity position in PetroChina, a major
integrated oil and gas company, through its IPO. This was followed in
September 2000 by a U.S. $400 million investment in Sinopec through its IPO.
A framework joint venture agreement was signed by BP and PetroChina in
August, 2000 as a first step aimed at jointly developing the gas market in the
Shanghai region.
The other partners in the Guangdong project are China National Offshore Oil
Corporation (CNOOC), which will hold a 33% stake. Guangdong companies
Shenzhen Investment Holding Corporation (14%), Guangdong Electric Power
Holding Company (6%), Guangzhou Gas Company (6%), Dongguan Fuel
Industrial General Company (2.5%) and Foshan Municipal Gas General
Company (2.5%). The remaining 6% will be shared equally between two Hong
Kong firms - Hong Kong Electric Holdings, Ltd and The Hong Kong and China
Gas Company Limited.
Further information:
Name: Toby Odone
Location: London
Phone : +44 0 20 7496 5256
Name: Yi Min
Location: Beijing
Phone : +86 10 64376962