BG Group signs $1.5bn deal with Bank of China
British gas firm will use funds to break into booming Chinese market
UK natural gas firm BG Group has today announced a new cooperation agreement with the Bank of China which will see the firm's coffers rise by $1.5 billion in a bid to break the lucrative Chinese gas market.
The deal was announced with a slew of other deals as part of Chinese Premier Wen Jiabao's state visit to Britain.
In a statement, BG Group said: "The Memorandum of Understanding signed today builds upon existing commercial relationships between BG Group and Bank of China and confirms the intention to make extended credit facilities available that can be used to help deliver the Group’s global growth plans - including its operations in China where the Group has an established commercial presence and where an initial offshore exploration programme is underway".
On signing the MoU with the Chairman of the Bank of China Gang Xiao, BG Group Chief Executive Sir Frank Chapman said: “This is a significant agreement for BG Group. It affirms and enhances our existing excellent relationship with the Bank of China. BG Group has a well established presence in China as a result of our LNG sales into this valuable and rapidly growing market, through a long-term sales and equity agreement with CNOOC in our QCLNG project in Australia, and with an extensive exploration programme offshore China that has already produced a discovery.
"This agreement builds on our existing facilities with Bank of China and provides the option for substantial additional funding for our commitments in China and also our global growth programme."
China surpassed the USA as the world's largest energy consumer in 2010, and accounts for 20.3% of total global energy demand, accoring to BP's Annual Statistical Review for 2010.
Natural gas is widely predicted to take over from oil as the world's largest source of energy used for power supply.