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BP Deepens Ties With China, Signs LNG Supply Deal With Zhejiang Energy

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BP plc (BP - Free Report) , the British oil and gas major, has recently signed a long-term LNG supply deal with China’s Zhejiang Energy. The 10-year LNG sales and purchase agreement marks another successful agreement between the two companies, following their decision to form a joint venture in China for the sale of LNG.

Per the terms of the agreement, BP will supply up to 1 million metric tons per year of liquefied natural gas to Zhejiang on a delivered ex-ship (DES) basis. Additionally, the LNG supplied on a delivered basis will be sourced from the British energy firm’s global portfolio. This deal also signifies that BP is growing its downstream presence in one of the largest LNG markets in Asia.

Zhejiang Energy has also signed agreements with other energy companies for LNG supplies. The Chinese energy firm signed an agreement with Exxon Mobil Corporation for the supply of 1 million metric tons a year of LNG for 10 years. The deliveries associated with this deal began in 2022. China is among the largest importers of LNG globally. The country is rapidly pushing toward reducing its usage of coal and switching to natural gas in order to meet its climate targets.

Previously, the United States was also an importer of LNG to China. However, amid the ongoing trade war between the two nations, China has been re-exporting a significant amount of LNG to its neighboring countries in Asia.

BP’s Zacks Rank & Key Picks

BP currently carries a Zacks Rank #5 (Strong Sell).

Some better-ranked stocks from the energy sector are Flotek Industries Inc. (FTK - Free Report) , Energy Transfer (ET - Free Report) and RPC, Inc. (RES - Free Report) . Flotek Industries presently sports a Zacks Rank #1 (Strong Buy), while Energy Transfer and RPC carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.

Flotek Industries specializes in green chemistry, which provides innovative solutions aimed at reducing the environmental impact of the energy industry. Flotek develops specialty chemicals tailored for both domestic and international energy producers, as well as oilfield service companies. These chemicals not only help reduce the environmental impact of hydrocarbon production but also lower operational costs.

Energy Transfer is a midstream player that owns and operates one of the most diversified portfolios of energy assets in the United States. Boasting a pipeline network extending more than 130,000 miles, its network spans over 44 states. With a presence in all the major U.S. production basins, ET's growth outlook seems positive.

RPC generates strong and stable revenues through a diverse range of oilfield services, including pressure pumping, coiled tubing and rental tools. The company is strongly committed to returning value to its shareholders through consistent dividend payments and share buybacks, making it an attractive choice for investors seeking steady returns.


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