ExxonMobil has announced a new agreement with China’s Zhejiang Energy to supply it with liquefied natural gas (LNG) over the coming 20 years. The deal will involve the oil giant delivering a million metric tons of LNG each year to help meet China’s energy demands.
ExxonMobil’s senior vice president of LNG, Peter Clark, said the deal was a significant milestone and would act as a good basis for developing a long-term strategic alliance with Zhejiang Energy. He also said:
“ExxonMobil shares Zhejiang Energy’s vision in developing a major LNG gateway in the Ningbo-Zhoushan region. We look forward to continuing our support for Zhejiang Energy during the construction, commissioning and operation of its Wenzhou LNG receiving terminal.”
ExxonMobil has a long history in China that started when Standard Oil—the giant oil company of J. D. Rockefeller that preceded ExxonMobil, among others—marketed kerosene to Chinese households for its Mei Foo lamps. More recently, it started returning to China in the 1970s as the country opened up its markets to foreign companies. The company now participates in many areas of Chinese industry, including supplying its high-quality lubricants to local Mobil stockists.
The company already supplies PetroChina and Sinopec with LNG following a sales and purchase agreement made in 2009. LNG is made from natural gas that has been cooled to a liquid form to take up about 1/600th of the original gas’s volume. This allows it to be transported more easily and safely to markets when there are no pipeline connections.