Royal Dutch Shell has signed a non-binding framework agreement with Guanghui Energy to jointly purchase and distribute liquefied natural gas (LNG) through a terminal which is being built by the latter in China.
Guanghui Energy is developing a gas receiving terminal at Qidong in Jiangsu province, which is expected to have an annual handling capacity of around 600,000 tonnes in its first phase.
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Shell was quoted by Reuters as saying: "Our cooperation with Guanghui has evolved and the current scope under discussion is a joint venture to purchase, import and on sell LNG through the Qidong terminal."
The deal is marks a ‘rare cooperation between a global energy company and a local private player.’
China based Guanghui Energy intends to expand the capacity of the terminal in second and third phases of development, according to industry sources.
Shell, which had initially intended to build and operate the terminal, later changed stance to be involved in purchasing and marketing of the gas which is transported in specialised tankers.
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By GlobalDataSeveral energy companies are emerging as LNG importers in China after third-party access to import terminals were allowed in the country.
In a separate announcement, the US has also allowed the Anglo-Dutch energy giant to drill for oil in the Arctic Ocean off Alaska.
