BP and China National Petroleum $20 Billion Deal

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China is becoming one the biggest energy consumers, giving the U.S. a run for its money, or should I say energy.

Image © BP P.L.C.: http://www.bp.com/browsebytheme.do?contentId=7002593&categoryId=9001237&currentPage=1

China ( FXE , quote ), in an effort to reduce reliance on "dirty energy" and secure cheaper energy, has entered into a contract with United Kingdom's oil behemoth BP ( BP , quote ) for natural gas.


The state-owned China National Offshore Oil Corporation's contract with BP is reported to be worth $20 billion dollars over 20 years.

China's global energy project seems to be in full swing with two deals in less than two months.  Earlier in May, China's state-owned China National Petroleum Company and Gazprom ( OGZPY , quote ) made an agreement to pump fuel via pipeline from Russia's ( RSX , quote ) Siberian wells to China's main depot centers.

Bottom Line:  As natural gas ( UNG , quote ) and liquid natural gas or LNG become the preferred choice of non-renewable energy, commodity price should reflect the increase demand. This shift should bode well for integrated companies like BP as well as natural gas pipeline companies



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , International , Stocks

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