Shenzhen Energy signs long-term BP LNG contract

SINGAPORE China's Shenzhen Energy Group has signed a long-term agreement with oil major BP to buy natural gas LNG aimed at locking in supplies with gas-fired power generation poised to surge in the world's second-largest economy.

The Chinese company said in a statement on Friday that the agreement is Shenzhen Energy's first long-term international LNG contract and its first long-term contract with BP Singapore.

The statement did not specify details of the agreement, including the duration of the contract.

It said that Shenzhen Energy Group is making efforts to promote the construction of gas power plants in order to meet the demand of Guangdong province and Shenzhen city for energy security and stability.

It is estimated that the total demand for natural gas will increase as gas power plants go into operation around 2024. China's LNG importers are expected to avoid the spot market this winter, where prices have risen sharply, instead relying on Russian supplies and long-term contracted volumes.

QatarEnergy has signed a 27 year deal to supply LNG to China's Sinopec in the longest such agreement to date, as volatility drives buyers to seek long-term supplies.