The BG deal power play in China

The Sunday Telegraph - Money & Business - - Business -

“I will be known as the CEO who led the BG deal,” said Ben van Beur­den, “af­ter hav­ing not done the deal a few times be­fore.”

Af­ter failed at­tempts to snap up the lead­ing player in the grow­ing liq­ue­fied nat­u­ral gas (LNG) mar­ket, the oil-price crash of­fered Shell one fi­nal op­por­tu­nity to buy the com­pany that has shaped its rein­ven­tion.

But the $50bn (£35bn) megadeal might not have hap­pened if China’s most ac­quis­i­tive com­pany had suc­ceeded in chal­leng­ing the su­per­ma­jor for con­trol of BG.

China was one of the last coun­tries to give anti-trust clear­ance to the en­ergy sec­tor’s big­gest deal in a decade af­ter Chem­china emerged as a last-minute in­ter­loper with an all-cash of­fer to buy the group.

Al­though Shell won the tug of war, the en­ergy gi­ant’s re­la­tion­ship with the world’s largest en­ergy user has grown from strength to strength.

Shell is the largest sup­plier of LNG to China, which is work­ing to wean it­self from coal-fired power to help re­duce the coun­try’s air pol­lu­tion cri­sis.

Fol­low­ing the BG ac­qui­si­tion, Shell ships more than 14m tons of LNG ev­ery year to China’s state-backed en­ergy com­pa­nies.

In re­turn, Shell sources around $1bn of petro­chem­i­cal prod­ucts from Chi­nese re­finer­ies.

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