China: GDF SUEZ Signs LNG Deals with CIC, CNOOC

On the occasion of his visit to China, Gérard Mestrallet, Chairman and CEO of GDF SUEZ signed two agreements today with China Investment Corporation (CIC) and China National Offshore Oil Corporation (CNOOC) illustrating the development strategy of GDF SUEZ in China and in the Asia-Pacific region.

Last August, GDF SUEZ and CIC announced an agreement for cooperation across multiple businesses and regions that will provide additional development opportunities for the Group, in particular in the Asia-Pacific region. A first steering committee co-chaired by Lou Jiwei, Chairman and CEO of China Investment Corporation and Gérard Mestrallet took place today in Beijing.

As the first milestone of this cooperation, GDF SUEZ and CIC officially signed today an agreement covering a €2.3 billion minority investment in the Exploration & Production Division of GDF SUEZ and the acquisition by CIC of a 10% stake in train 1 of the Atlantic LNG liquefaction plant in Trinidad and Tobago.

As part as the development of its activities in the region, GDF SUEZ also signed with CNOOC a cooperation agreement in the liquefied natural gas (LNG) sector. Through this agreement, GDF SUEZ will provide CNOOC with a shuttle and regasification vessel to be used as a floating storage and regasification unit in China. This follows the recent signing of a cooperation framework agreement with Beijin Gas Group which covers several fields of cooperation such as natural gas, LNG or energy services.

Gérard Mestrallet, Chairman and CEO of GDF SUEZ said: “We are very pleased to hold the first steering committee meeting of our partnership with CIC that is opening strong growth prospects for all businesses in the Group. After the signing of an agreement with Beijing Gas, we are also very pleased to develop our cooperation with CNOOC, one of the energy leaders in Asia, with whom we have already signed a medium term LNG supply agreement last year. These events show our strategic commitment to China and to the Asia-Pacific region.”

A landmark partnership with CIC

GDF SUEZ and CIC will cooperate on a non-exclusive basis to help accelerate their respective strategies. The partnership will be deployed across GDF SUEZ Group’s businesses (natural gas, electricity, water and waste, and energy efficiency services) and sets up the framework for cooperation in three areas:  joint investment opportunities in existing and new energy-related projects in the Asia-Pacific region; financing cooperation in new projects in the region; and commercial sponsorship and support to GDF SUEZ in the region.

In this framework, CIC has agreed with GDF SUEZ to make an investment in the Group’s Exploration & Production Division (excluding the 22.5% equity stake in EFOG). CIC will own 30% of GDF SUEZ E&P following a capital increase.

As part of the transaction, CIC will also acquire from GDF SUEZ a 10% stake in train 1 of the Atlantic LNG liquefaction plant located in Trinidad and Tobago as well as production payments associated with trains 2, 3 and 4 for an amount of €0.6 billion.

The transaction is expected to be finalized by the end of 2011.

A new agreement with CNOOC in the LNG field

GDF SUEZ and CNOOC Gas & Power Group Ltd, a wholly owned subsidiary of CNOOC, announce the signature of a cooperation agreement to work closely on CNOOC’s planned LNG floating storage and regasification units (FSRU) projects in China. In connection with this medium-term agreement, starting around 2013, GDF SUEZ will provide CNOOC a shuttle and regasification vessel (SRV), the “GDF SUEZ Cape Ann,” that will be permanently moored for use by CNOOC as a floating storage and regasification unit.

In October 2010, GDF SUEZ and CNOOC, the largest importer of LNG in China, had already signed a medium-term agreement under which GDF SUEZ will sell CNOOC about 2.6 million tons of LNG starting in 2013 for a 4-year period.

GDF SUEZ charters two SRVs, the GDF SUEZ Cape Ann and the GDF SUEZ Neptune, delivered in 2009 and 2010. Each vessel has a capacity of 145,000 m³ of LNG with a maximum send-out capacity of 21 million m³  of natural gas a day.

GDF SUEZ is the 3^rd largest LNG importer in the world, with a fleet of 17 LNG carriers and a significant presence in regasification terminals in North and South America, Europe and India. GDF SUEZ considers Asia to be a core development region for its LNG business, with strong growth prospects and new supply potential. The Group will contribute to the development of this market by developing Bonaparte LNG, a 2 MTPA floating LNG project in Australia.

The sub-chartering FSRU agreement is subject to final Chinese government approval.

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Source: GDF SUEZ, October 31, 2011;