French energy company grabs Chinese gas agreement

PARIS, Sept. 27 (UPI) -- French energy company ENGIE said it was enhancing its position in the market for liquefied natural gas by securing an agreement with partners in China.

The French company known formerly as GDF Suez said it was selected by Beijing Gas Group to supply 10 shipments of liquefied natural gas over 12 months starting in November.

"This deal further cements ENGIE and BGG's relationship, following the maiden import of LNG supplied by ENGIE to BGG in 2015, and ensures the security of supply for this winter in Beijing," the French company said in a statement.

Chinese demand for energy products has declined slightly as its economy moderates from around 6.8 percent growth during the fourth quarter of last year to around 6.7 percent during the first half of 2016. While advancing on domestic production fronts, the economy is moving more toward natural gas to feed sectors like transportation.

China has worked closely with Russia for natural gas deliveries and both countries are tied together by pipeline networks. LNG shipments offer more maneuverability than pipelines, which are exposed to geopolitical risk.

ENGIE is a minority partner with Russian natural gas company Gazprom at a project meant to double the capacity of the Nord Stream pipeline system through the Baltic Sea.

Philip Olivier, the CEO for global LNG at ENGIE, said the agreement with the Beijing company diversifies the company's portfolio.

"We are confident that our cooperation will contribute to cover China's growing energy needs," he said.