(Yicai Global) July 7 -- Chinese power and gas distributor Guangzhou Development Group intends to continue buying liquefied natural gas from BP Singapore through 2034 to ensure a stable long-term supply of clean energy.

Its wholly owned unit Guangzhou Development Natural Gas Trading will sign a new agreement to buy 650,000 tons of LNG a year from BP Singapore, the parent company said in a statement late yesterday.

The distributor’s major business is in China’s southern Guangdong province and it also focuses on public affairs and services. In recent years Guangzhou Development has begun dabbling in LNG imports by building and operating receiving stations. It set up a unit to handle imports of the fuel early last year.

Pricing will be determined based on a formula agreed with BP Singapore, helping Guangzhou Development dodge the risks posed by big moves in international crude oil prices, it added.

Based on the benchmark price of LNG of CNY4,346 (USD671.8) a ton on July 6, provided by commodity market research platform SCI99.com, the contract would be worth about CNY2.83 million (USD 437million) a year.

Guangzhou Development’s shares [SHA: 600098] closed 1.6 percent lower today at CNY6.18 (96 US cents). The broader Shanghai Composite Index rose 0.7 percent.

Editor: Peter Thomas