Contract

BP PLC
26 September 2002

                    BP AT FOREFRONT OF CHINA'S LNG STRATEGY

                           AS FUJIAN CHOOSES TANGGUH





BP and its partners in Indonesia's Tangguh natural gas project today signed an
agreement to supply liquefied natural gas (LNG) to China's Fujian LNG terminal.



The agreement now sees BP in all three legs of China's LNG strategy. Last month,
China selected Australia's North West Shelf consortium - in which BP is an equal
(16.7 per cent) shareholder - to supply three million tonnes of LNG a year to
China's first LNG terminal in Guangdong Province. BP was also chosen last year
as China's foreign partner in the construction of the Guangdong LNG terminal and
pipeline, which will access a market that is forecast to grow rapidly. Gas
currently meets just two per cent of China's energy needs, but this is projected
to increase to between seven and eight per cent by 2010.



The 25-year LNG Sales and Purchase Agreement signed in Jakarta today between
Tangguh and the China National Offshore Oil Corporation (CNOOC), will involve
the supply of up to 2.6 million tonnes of LNG a year to Fujian. An agreement in
principle for CNOOC participation in Tangguh was also signed. Construction of
the Fujian terminal is expected to start in 2004 and operations are scheduled to
begin by 2007, shortly after completion of the Guangdong terminal. The
agreements are subject to usual regulatory and other conditions and the
development of further detailed terms.



BP Group Chief Executive Lord Browne said BP was honoured to be a leading
participant in all three major LNG projects in China, one of the fastest growing
energy markets in the world and the second largest energy consumer after the
United States. 'Gas - the world's cleanest fossil fuel - currently accounts for
just over two per cent of China's energy consumption and the Fujian and
Guangdong LNG terminals will play pivotal roles in achieving China's goal of a
four-fold increase in natural gas consumption by 2010,' he said. 'The agreement
is also good news for Indonesia and for the Tangguh project which will add
significantly to the country's marketable LNG reserves and play a major role in
maintaining Indonesia's global leadership position in the LNG industry.'

Located in the Berau-Bintuni Bay region of Indonesia's Papua province, Tangguh
is being designed with a capacity to produce seven million tonnes of LNG per
annum from two initial processing trains. The Tangguh gas fields contain 14.4
trillion cubic feet of certified proved natural gas reserves plus potential
additional resources. The project will set high technical, environmental and
social standards and bring significant benefits to the Indonesian economy and
the people of Papua province.



Notes to Editors:



The Tangguh Project is currently in discussion with major international
financial institutions to provide funding for construction of the Tangguh LNG
facilities. Japan has traditionally been the premier source of financing in
support of Indonesian LNG, and, with a 40 percent working interest in Tangguh
production sharing contracts held by Japanese companies, Japan is expected to
represent the most substantial long term market for future Tangguh LNG sales.



The percentage shares of Tangguh proved reserves attributable to the  production
sharing contractor interests are: BP 50 per cent, Mitsubishi 16 per cent, Nippon
12 per cent, BG 11 per cent, KG (Kanematsu Corp, Japan National Oil Corp and
Overseas Petroleum) 10 per cent, and Nissho Iwai one per cent.



Further enquiries:



Toby Odone, BP press office, London:  [phone]



                                    - ENDS -




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