Exxon Mobil Corp said on October 18 it signed a framework agreement for a liquefied natural gas (LNG) supply deal with Zhejiang Provincial Energy Group, the Chinese company's first long-term supply deal.
Peter Clarke, the president of Exxon Mobil gas and power marketing, inked the 20-year supply deal in a signing ceremony during the International Petroleum and Natural Gas Enterprise conference at Zhoushan, in Zhejiang province, the company said in a statement.
The Chinese company will receive 1 million tonnes of LNG per year from Exxon Mobil under the agreement, Zhejiang Energy President Tong Yahui told Reuters on the sidelines of the event.
Exxon Mobil said in the statement it will deliver the LNG starting in the early 2020s.
Exxon Mobil is stepping up its efforts to meet soaring LNG demand, coupling multi-billion dollar production projects around the world with its first mainland storage and distribution outlet.
LNG supplies to China would come from a combination of Exxon Mobil's global portfolio – not necessarily from the United States – as the company boosts output from Papua New Guinea and Mozambique, Clarke said on the sidelines of the meeting.
State-owned Zhejiang Energy is a coal producer and utilities operator, and formed a joint venture earlier this year with commodities trader Glencore to trade energy products including LNG.
Zhejiang Energy is teaming up with state-owned Sinopec Corp to build a LNG receiving terminal near the city of Wenzhou in Zhejiang with a capacity of 3 million tonnes per year. The plant is planned for start up by the end of 2021.
Sources:sxcoal
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