THIS WEEK: LNG is most known foreign word in Chinese villages after karaoke

Tuesday, 06 November 2012
2012 nov_06

“During a Fujian trip, I saw that LNG had brought tremendous changes to the remote villages.

“LNG is more and more familiar to people and most of the villagers only know two foreign words ‘karaoke” and now a second, the English word ‘LNG’,” Zhang told an audience at China National Offshore Oil Corp., the largest Chinese LNG import terminal owner and developer.

Zhang said he fully recognised the contribution made by CNOOC in making LNG widely known in the Chinese countryside.

He described the Fujian LNG import terminal as “a tidy garden-like factory full of talent and cultivation, with a good safety record, and making a big contribution to the local economy.”

The serious side to Zhang’s message is that the development of LNG and natural gas infrastructure in China is progressing at the forecast fast pace.

In May this year, CNOOC added two 160,000 storage tanks at its Fujian LNG receiving terminal (pictured above), doubling storage capacity to 640,000 cubic metres.

The country currently has six import terminals in operation and most have expansion plans in progress. Two other import facilities are expected to be in operation within 18 months.

Fujian import terminal, on the southeast coast of Fujian province, receives 2.6 million tonnes per annum of LNG from Indonesia under a long-term supply contract as well as additional spot cargoes bought on the open market.

The nearby CNOOC-controlled Putian gas-fired power plant takes almost one third of the regasified LNG from the Fujian facility to produce electricity.

However, away from the main pipeline networks, fleets of tanker trucks transport LNG to end- users across China and in more and more cases use LNG as fuel.

CNOOC achieves healthy revenue from LNG trucked out of its receiving terminals, including its oldest facility, Dapeng LNG in southern Guangdong province, which has been in operation since 2006.

In addition, China has around 4,000 trucks nationwide fuelled by LNG and more are being put on the roads every year.

According to forecasts, the eastern province of Jiangsu alone will have 5,000 LNG-fuelled vehicles, including buses, by 2016.

In Guangdong, the local government is seeking to replace liquefied petroleum gas, a more costly refinery product, with LNG to fuel its buses.

LNG is a commodity associated with power, progress, prosperity and transportation in China. That’s why the Chinese will be importing up to 45 million tonnes per annum of LNG within seven years, over 30 MTPA more than it does now.