Italian major Eni and China’s Zhejiang Energy have signed a memorandum of understanding on strategic co-operation in the energy sector.

The agreement establishes a co-operation framework aimed at facilitating joint initiatives between the two companies across the gas and liquefied natural gas value chain in China and internationally.

ENERGY EXPLORED: SUBSCRIBE TO ACCELERATE

Gain valuable insight into the global oil and gas industry's energy transition from ACCELERATE, the free weekly newsletter from Upstream and Recharge. Sign up here today.

The MoU, signed on Tuesday, builds on the companies’ shared goal of promoting a reduction in emissions by favouring a switch from coal to gas in the production of electricity.

Decarbonising power generation

Using gas to produce electricity instead of coal reduces by as much as half the greenhouse gas emissions of a power plant, providing an immediate step forward in decarbonising the sector.

The initiatives identified in the memorandum range from developing long-term LNG supply agreements to joint participation in gas and LNG projects.

For Eni, the MoU represents a further step in the energy transition process.

The Italian company recently launched a new strategy, which will lead it to be carbon neutral by 2050 in all its operations, processes and products. In the long term, gas – which will be increasingly decarbonised – will represent more than 90% of the company’s production.

Eni, which has been present in China since 1984, recently established a new representative office in the capital Beijing.

Zhejiang Energy is no stranger to international tie-ups having created a joint venture company with French supermajor Total in October 2019. This jointventure is dedicated to the supply and delivery of marine fuels in the region of Zhoushan, China.

Zhejiang Energy is the 51% majority partner in this joint venture company.

The Zhoushan region covers Ningbo and Shanghai ports, the “busiest shipping hub in the world in terms of cargo tonnage”, Total said at the time.