BP and Shell to announce multi-billion pound deals with China

British oil companies BP and Shell are expected to propose multi-billion pound trade deals to visiting Chinese premier Li Keqiang, as a way to establish a privileged relationship between the UK and the Asian superpower.

BP is said to offer a £5 billion long-term deal to supply liquefied natural gas (LNG) to China, while Shell is expected to propose co-operation on gas and other projects with the China National Offshore Oil Corporation (CNOOC).

Together, the agreements are expected to account for about £18 billion in deals signed between the UK and China.

During a conference, BP chief executive Bob Dudley said, “It is a 20-year supply agreement on LNG. It is a fair price for them and a fair price for us. It is a good bridge between the UK and China in terms of trade.”

The deals would be initiated during the three-day visit of Chinese premier Li Keqiang, who is travelling with 200 Chinese business leaders and bankers.

China is taking some significant steps to change its energy system, as a way of reducing pollution and slashing domestic greenhouse gas emissions. It recently signed a multi-billion pound gas deal with Russia.

David Cameron is hoping to strengthen the investment relationships between the UK and China and it is expected that other issues, such as Chinese participation in the construction of nuclear power plant Hinkley Point C and investment in British infrastructure, will be discussed.

Liu Xiaoming, Chinese ambassador to Britain said on Monday that the two countries were expected to sign over 40 agreements in various sectors including energy, culture and education.

Photo: Renato Ganoza via flickr

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