BP plc clinched a 20-year contract this week worth close to $20 billion to supply China with liquefied natural gas (LNG), including from a proposed export plant in Freeport, TX, Group CEO Bob Dudley said Tuesday. A similar agreement between Royal Dutch Shell plc and China also is said to be nearing completion.

Speaking at the World Petroleum Congress in Moscow, Dudley said the long-term contract with state-owned China National Offshore Oil Corp. (CNOOC) would be finalized in London this week with British Prime Minister David Cameron and Chinese Premier Li Keqiang, who is on a three-day visit.

“It’s a big deal, a fair price for them and a fair price for us,” Dudley said. The transaction also offers “a good bridge” between the UK and China in terms of trade.

BP now supplies CNOOC with LNG from Indonesia. BP has LNG projects worldwide, including contracts with Freeport LNG Expansion LP to export up to 4.4 million metric tons/year of gas from the proposed facility on Quintana Island (see Daily GPI, Feb. 12, 2013). Federal Energy Regulatory Commission staff just days ago issued a final environmental impact statement for the second phase, and it has received all of the required Energy Department authorizations for the first three trains (see Daily GPI, June 16; Nov. 21, 2013). BP also is part of a consortium that wants to build a LNG export facility in Alaska to supply Asia-Pacific markets.

The transaction with BP alone is expected to boost China’s LNG intake by at least 1.5 million metric tons/year, or about 26 cargoes a year. Dudley offered few details on the financial aspects of the transaction. However, it is expected to be similar to one CNOCC signed last year with BG Group to deliver LNG cargoes from proposed U.S. and Australian export plants. The BG deal was a dual-pricing scheme that reflected inexpensive U.S. gas prices. The BP and Shell transactions are expected to have similar pricing structures to cap the fuel import prices.

The mega-deals with Shell and BP, two of the European Union’s leading producers, would follow a historic agreement last month by China to buy $400 billion of Russia’s natural gas over 30 years (see Daily GPI, May 21). State-owned China National Petroleum Corp. secured the contract with Russian-owned OAO Gazprom.