LNG

Chinese buyers return to the spot market amid a stark drop in prices. Beijing Gas and Zhejiang Energy reportedly procured LNG cargoes at around $10/MMBtu this August for autumn arrival.

Chinese liquefied natural gas imports rose year-on-year by 4.2 percent last month and over 18 percent in the year-to-date period, keeping the nation on track to be the world’s No. 1 LNG importer for 2021.

China Gas Holdings, one of the leading non-state controlled companies in the Chinese city-gas and LNG sectors and state-backed Beijing Gas Group, have signed a strategic cooperation agreement to stabilise LNG flows to North China.

Gaztransport and Technigaz (GTT), the French liquefied natural gas technology company, received the final approval for its newest LNG storage tanks for carriers from Europe’s three leading maritime classification societies.

China’s Huaying Natural Gas, a private company building a city-gas business in the southern province of Guangdong, said it had begun construction of a liquefied natural gas import terminal with receiving capacity of 6 million tonnes per annum.

The facility is located in the port city Chaozhou and involved first-phase investment of 8 billion Chinese yuan ($1.22 billion) and with the start-up scheduled for 2023.

The company also plans to invest 4 billion yuan to build some ancillary facilities at the terminal and to purchase its own LNG carrier to bring in cargoes.

Three gas storage tanks with capacity of 200,000 cubic metres each will be built alongside the first stage of the Chaozhou project and another four storage tank are planned for the second phase.

The Chaozhou terminal will add to the seven LNG terminals already operated in Guangdong province, along with two other projects that are currently under construction.

A total of nine Chinese LNG projects, including new terminals and expansions, were scheduled to advance in 2020, though several have been delayed.

State-controlled China National Offshore Oil Corp. currently has capacity at nine of China’s network of the more than 20 LNG import terminals and ports.

CNOOC’s LNG import capacity is held at most of the regasification terminals south of Shanghai, the port city where it has capacity at one facility.

It has additionally been a foundation customer with the Australia Queensland Curtis export plant on Curtis Island, near Gladstone.

CNOOC said in its most recent earnings that it was planning to increase storage capacity at its Binhai import terminal under construction in the eastern Jiangsu province, where it would reserve two tanks to help with the imported gas needs for a province in Central China.

CNOOC said it would construct around 1.62 million cubic metres more of storage capacity for LNG at the facility.

The expansion will consist of six tanks, each with storage capacity of 270,000 cubic metres each and construction is expected to be completed in 2023.

The first phase of CNOOC’s Binhai LNG terminal is still being built and will be capable of receiving 3 million tonnes of LNG per annum and will have four storage tanks of 220,000 cubic metres each.

Total investment in the project has risen to 17 billion Chinese yuan ($2.60 billion), up from an initial estimate of 14.4Bln yuan ($2.2Bln).

CNOOC said that the government of Henan, a province in central China, will invest in two of the tanks, though CNOOC will operate them to meet growing natural gas demand in both Henan and Jiangsu.

China Petroleum and Chemical Corp. (Sinopec), is the other main Chinese state-controlled LNG importer.

Sinopec, which plans to more than double its LNG receiving capacities to 41MT by 2025, currently has capacity at three Chinese import terminals and is a partner of US major ConocoPhillips in the Australia-Pacific LNG export plant in Queensland.

The Chinese company’s regasification capacity in addition to Tianjin is at two other facilities, the Qingdao terminal in Shandong province and the Beihai LNG terminal in the Guangxi autonomous region bordering Vietnam.

China is currently reforming its pipeline and terminal systems by giving more access to third-party shippers.

Sinopec’s plans include expanding the Tianjin terminal, which supplies Beijing, to have a capacity to handle 12MT of imports.

French industrial gases company Air Liquide, plans to build an air separation unit (ASU) in the Lingang Economic District of Tianjin Port, the growing centre of Chinese LNG imports for use in the domestic market and by industry.

Air Liquide, whose latest China plans were announced in a statement to the Euronext stock exchange in Paris, has been supplying industrial gases to the Chinese Tianjin industrial basin for many years and operates seven Chinese production facilities.

“With an oxygen production capacity of more than 2,000 tons per day, this ASU will notably allow Air Liquide to support the growth of the chemical and steel industries in the Tianjin basin, secured by a new long-term supply agreement with a major customer,” said the company.

Air Liquide will build, own and operate this new ASU, which has been designed leveraging the group’s latest state-of-the-art technology, for the low-carbon and energy-efficient production of oxygen, nitrogen and argon.

One Air Liquide’s main competitors in China is Air Products, the US company based in Pennsylvania which combines its industrial gas business with its LNG equipment making.

Air Products is the world’s leader in LNG technology and equipment, but is also investing in industrial gas provision in various Chinese provinces.

Air Liquide’s main LNG sector sales are linked to its Turbo-Brayton cryogenic equipment, with around 50 units sold over the last two years.

The technology, developed by Air Liquide and based on the Turbo-Brayton principle, reliquefies LNG boil-off gas on vessels transporting the product, thereby significantly reducing greenhouse-gas emissions during transportation.

Air Liquide now operates nearly 100 industrial gas facilities in China and employs close to 5,000 people with a strong presence in the key coastal industrial areas.

The latest Air Liquide investment in Tianjin, which borders Hebei Province and the Beijing municipality, will incorporate a dedicated capacity to support small-and-medium sized customers of liquid and packaged gases. It is planned to be operational in 2022.

The latest investment will amount to around €60 million ($70M), added the company.

The Chinese operator Beijng Gas is developing more LNG import capacity in Tianjin, which already has two import facilities.

The company’s Nangang import project at Tianjin is currently scheduled to come on line in 2022 with 10 tanks and up to 2 million tonnes of storage.

The Beijing Gas terminal will have an initial 5 million tonnes per annum of LNG capacity and adds to the supply available from Sinopec’s Tianjin North import terminal and the Floating Storage and Regasification Unit (FSRU) capacity deployed in recent years by China National Offshore Oil Corp.

Air Liquide’s China subsidiary currently operates seven ASUs in Tianjin in the industrial gases sector, as well as a network of multi-sourced pipelines that deliver oxygen, nitrogen and hydrogen to adjacent customers.

“One of the most important industrial cities in the country and the largest port in Northern China, Tianjin is a key basin for Air Liquide in China,” explained François Abrial, a member of Air Liquide Group’s Executive Committee supervising the Asia-Pacific region.

“This new investment in the 8th ASU clearly demonstrates our commitment to the long-term partnership we have built with our customers there,” added Abrial.

Beijing Gas, the growing liquefied natural and pipeline supplier, maintained substantial revenues in the first half of 2020 while profits fell as the company said it was advancing its LNG import projects in Tianjin and Tangshan.

The area around Tianjin in northeast China currently has floating and onshore import terminals and is already the nation’s leading LNG importer, but an expansion of the onshore terminal and the construction of a new facility, the largest in China, will turn the Port into the main China LNG Hub and the biggest in Asia.

According to Customs data, Tianjin accounting for nearly 20 percent of all Chinese LNG imports during the first four months of 2020.

From January to April, LNG imports through the Tianjin port increased 25.6 percent year-on-year to total 3.92 million tonnes.

The LNG imported through the port mainly came from Australia, Russia and Asian nations such as Malaysia and Indonesia.

The Tianjin North onshore terminal is operated by China Petroleum and Chemical Corp., also known as Sinopec.

Sinopec, which plans to more than double its LNG receiving capacities to 41 million tonnes by 2025, currently operates three import terminals.

It is also a partner of US major ConocoPhillips in the Australia-Pacific LNG production plant in Queensland with a contract for more than 7 million tonnes per annum of supplies.

The Chinese company operates three terminal in China at Qingdao in Shandong province, the Tianjin North terminal and the Beihai facility in the Guangxi autonomous region bordering Vietnam.

There has also been a Tianjin floating storage and regasification unit (FSRU) deployed since 2013 by China National Offshore Oil Corp., the nation's largest LNG importer.

The role during the past couple of winter seasons has been carried out by the “Höegh Esperanza”.

Sinopec’s plans include expanding the Tianjin terminal, which guarantees supplies to Beijing during winter, to have a capacity to handle 12 MTPA of imports.

Another import project is being developed at Tianjin by Beijing Gas Group and is known as the Nangang project.

It is currently scheduled to come on line in 2022 with 10 tanks and up to 2 million tonnes of storage.

Beijing Gas has obtained the government's approval to construct the terminal with huge storage tank capacity in the Nangang district of Tianjin City, giving the port area three separate facilities and eventually up to 25 MTPA of capacity, making it the biggest single LNG import centre in Asia.

Nangang will have an initial 5 MTPA of capacity and will then be gradually expanded.

The Asian Infrastructure Investment Bank, backed by the Chinese government, said in December 2019 it was investing $500 million in the new Beijing Gas LNG project.

With a population of around 113 million, the Beijing-Tianjin-Hebei region is one of the most important economic engines within China and has increasing natural gas demand.

Beijing Gas is mainly engaged in city-gas distribution and supplies more than 10 billion cubic metres per annum to the Chinese capital and surrounding areas.

Its new Tianjin terminal will also have a jetty to receive the largest carriers of 260,000 cubic metres capacity.

There will additionally be a pipeline of 230 kilometres to send regasified LNG supplies from the coast to gas storage facilities near Beijing. 

Beijing Gas Group has obtained the government's approval to construct a liquefied natural gas import terminal with huge storage tank capacity in the Nangang district of Tianjin city, giving the port of Tianjin three facilities to guarantee energy supply security to the Chinese capital.

French energy and utility company Engie said it was selected by Beijing Gas Group after a tender process to supply the Chinese capital for a second year with its additional winter natural gas needs in the form of LNG deliveries.