Wednesday, January 22, 2014

China may import feedstock butane on robust demand in 2013-2014

Chinese state oil and gas company Sinopec plans to bring in the first commissioning cargo at its Qingdao terminal in October, according to a source close to the process.The 3mtpa capacity terminal, located in the Shandong province in eastern China, is around 85% complete and construction is expected to be completed in the second half of year, allowing Sinopec to import its maiden LNG cargo in October.

A Sinopec spokesperson has previously said that the company would consider purchasing spot LNG cargoes for the terminal before the start-up of its long-term contracts, although it could not be determined whether the state company has already started to make enquires with suppliers for the commissioning cargoes.Sinopec plans to bring contractual LNG into Qingdao from the ExxonMobil-led PNG LNG project in Papua New Guinea where Sinopec has a 2mpta offtake agreement. The project is expected to start operations in late 2014.

 China Lng import Sources

Additional LNG supplies will then come from the Australia Pacific LNG (APLNG) project, where Sinopec has purchased 4.3mtpa from the initial APLNG train, expected to start operations in 2015, and 3.3mtpa from the second train in 2016.

Sinopec’s natural gas subsidiary will operate the terminal and has been in discussions with downstream customers to import LNG via truck delivery, a company source said. The state company also plans to establish a joint venture with private Chinese energy company ENN Trading and Hengtong Logistics to establish a LNG truck delivery service from the terminal.

ENN and Hengtong Logistics have over 300 trucks in service.Sinopec’s LNG import plans had languished behind those of China National Offshore Oil Corp (CNOOC) and PetroChina, its two state-owned competitors, but having secured long-term supplies, Sinopec has stepped up the pace of its terminal plans in an effort to build market share.After the completion of the Qingdao facility, Sinopec aims to finish the construction of its 3mtpa facility at Lianyungang in the northeast Jiangsu region in 2015, its 3.5mtpa Beihai LNG terminal in Guangxi province by the end of 2015, and its 3mtpa terminal in the northern Tianjin province by 2016.

China's Natural gas production and consumption 2000-2011

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