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BP Wins Bid for Shenzhen Gas Project
Energy company BP has been provisionally selected as the exclusive foreign partner for China's US$60 million liquefied natural gas (LNG) terminal and trunkline project in Shenzhen, but will not necessarily be the LNG supplier for the scheme.
The project is designed to import LNG and turn it into gas, which will be then transported, via the pipeline, to users in Guangdong Province.
According to an announcement at the project's office in Guangzhou, co-operation documents are expected to be signed soon in Beijing between BP and the eight Chinese sponsors of the project.
BP will hold a 30 per cent stake in the project, China National Offshore Oil Corp (CNOOC Corp) will have 33 per cent and the other six Chinese companies will have a combined stake of 37 per cent.
BP still has to complete a feasibility study and negotiations with the scheme's mainland and Hong Kong partners about the fine details of the project. But the design stage is expected to begin by the end of this year, said Cao Yunshi, senior vice-president of China National Offshore Oil Co Ltd, a spin-off company of CNOOC Corp.
Construction is expected to start in 2002 in Guangdong Province's Shenzhen.
BP, selected from 10 foreign applicants after a seven-month evaluation process, is to invest 1.5 billion yuan (180 million) in the first phase of the project, which will include building a terminal to turn the liquid back into gas. This centre will have an annual capacity of 3 million tons. The first phase will also include a 300 kilometre-long pipeline.
In the second phase, to be completed by 2008, an additional 2 million tons of liquid gas will be imported annually.
The construction of the terminal and the pipeline should be a lucrative project, as BP is also likely to win the right to import liquefied gas to supply the project.
BP spokesman Yi Min said the LNG supplier has not yet been decided, but he added: "BP has expressed its strong desire to supply
LNG for the project.
"We have resources in the region, including Indonesia's Tangghu field and oilfields in Australia, to supply us,'' he said.
"It is hard to say whether BP will be picked as the scheme's gas supplier, but I think the government will fully consider the price and security of LNG supply, which is the strength of BP,'' he added.
According to an announcement released by BP China yesterday, the project would complement BP's existing gas marketing alliance with the nation's top oil company -- PetroChina -- and build on BP's experience developing industry-leading LNG terminal and liquefaction projects in places such as Bilbao, Spain, and Trinidad, the West Indies.
The long-expected Guangdong LNG project is a pilot attempt in China to satisfy the growing demand for energy and to reduce pollution
brought about by rapid economic growth.
BP expects natural gas to account for between 7-8 per cent of thecountry's energy needs in 10 years, up from just 2 per cent at resent.
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