BP has signed a memorandum of understanding with Brass LNG in Nigeria to purchase two million tons a year of liquefied natural gas (LNG). The deal, which is expected to be concluded later this year, will cover a 20 year period, starting in 2010.
The LNG will be delivered by Brass and used by BP to supply multiple markets in the Atlantic basin. Under an innovative flexible contractual arrangement, it will be primarily targeted at the growth markets of the UK and the US but may also be supplied to other existing LNG markets and a number of proposed new terminals which BP and its partners are seeking to develop in New Jersey and Texas, in the US, and at Rosignano in Italy.
Anne Quinn, BP's group vice president, Gas, Power and Renewables, said: "BP is delighted to have reached this understanding with Brass LNG which reflects the attractiveness of our LNG market positions to suppliers. It will enable us to add to our already robust portfolio of both equity and third party LNG supplies, develop our merchant LNG business further and have greater scope and flexibility to respond to market demand. We look forward to working with Brass LNG and to a long-term, productive relationship."
The new LNG supply will complement BP's equity LNG from Trinidad, Australia, Indonesia and Abu Dhabi, which will make up the majority of its portfolio, together with LNG from Egypt and third party purchase agreements with Oman and Qatar.
BP is one of the world's largest suppliers of LNG, measured by gas into LNG plant. The company is the largest shareholder in the Atlantic LNG plant in Trinidad and has interests in LNG producing plants in Australia (North West Shelf) and Abu Dhabi (Adgas). BP is an existing gas supplier to Indonesia's Bontang LNG plant and, together with its partners, is developing the major new Tangguh LNG production facility in Indonesia which has already concluded contracts to export LNG to China, Korea and the west coast of North America, the first long-term trans-Pacific LNG contract.
BP also has access to LNG markets across the world. In China, BP is the only foreign participant in the country's first LNG import facility being constructed at Guangdong and a partner in the LNG projects which are supplying this and the second terminal being developed at Fujian (North West Shelf and Tangguh respectively). In the US, BP holds one third of the capacity in the Cove Point LNG import terminal in Maryland and is proposing to develop new LNG import terminals at Crown Landing, New Jersey and Bay Crossing, Texas. In Europe, BP is a 25 percent shareholder in the LNG import and re-gasification terminal in Bilbao, Spain; holds 50 percent of the capacity rights at the UK's Isle of Grain LNG import facility; and is working with its partners to develop a new import terminal at Rosignano in Italy.
BP also has LNG purchase agreements with LNG suppliers in Egypt, Oman and Qatar and supply agreements with companies in Korea, the Dominican Republic, Japan and the US.