LNG supply deal diversifying China’s energy mix

Guangzhou Gas Group, a subsidiary of China’s Guangzhou Development Group, has inked a long-term liquefied natural gas (LNG) sales and purchase agreement (SPA) with Mercuria Energy Trading, a subsidiary of global energy and commodity group Mercuria Energy.

Formalized at the 29th World Gas Conference in Beijing, the deal entails the supply of LNG from Mercuria to Guangzhou. The latter expects this to boost its capacity to secure stable gas resources, optimize the local energy mix, and reduce carbon emissions.

The agreement is described by the energy and commodity group as a significant step in strengthening energy cooperation between the two organizations and regional energy security. It is also seen as an important milestone advancing cleaner energy cooperation in China’s Greater Bay Area and supporting China’s dual-carbon goals.

Officials from both companies attended the event. This included Cai Ruixiong, Chairman of Guangzhou Development Group, Qiao Wukang, Deputy General Manager, and Xin Ruikun, Executive Director of Guangzhou Gas Group. Mercuria was represented by Steve Hill, Executive Vice President of Mercuria Gas and LNG; Tao Haisu, Chairman of Mercuria China; and Tony Ford, Chief Executive Officer of Mercuria Asia.

Additionally, Mercuria believes the deal consolidates its role as a strategic LNG partner in China and the Asia-Pacific region. The group sees it as a reflection of its long-term commitment to driving decarbonization through pragmatic commercial collaboration and sustainable supply chain development.

The uptick in LNG imports to Asia is in line with predictions that around 70% of the global LNG market demand will come from the continent. In addition to the current deal, Woodside recently signed a long-term supply agreement with China Resources Gas International Limited.