LNG

Chinese liquefied natural gas imports in March 2023 rose by almost 16 percent as demand showed its most significant monthly increase in 14 months.

Gaztransport and Technigaz (GTT), the French LNG storage technology company, has completed the construction of two full containment tanks for the new Nangang LNG import terminal being constructed by the parent company of Beijing Gas Group at Tianjin port in northeast China.

GTT’s order was received from its partner company, China Huanqiu Contracting and Engineering Co. (HQCEC), for the design of eight very large storage tanks each with a capacity of 220,000 cubic metres.

“They are the world's largest onshore LNG storage tanks incorporating the GST® membrane containment technology,” said GTT.

The Paris-based company said the construction schedule remained on track despite the constraints imposed by the Covid-19 pandemic.

GTT added that the two onshore tanks were now entering the commissioning phase and would be operational in the first half of 2023.

The new Tianjin-Nangang project comprises three phases and will be the the third facility to serve the northeast Chinese port supplying the gas needs of Beijing.

The existing facilities currently include the Tianjin North onshore terminal operated by China Petroleum and Chemical Corp. (Sinopec) and had included a separate floating facility when required.

Huge project

“The construction of these first two onshore tanks marks an important milestone for BGG's LNG terminal in Tianjin,” said Philippe Berterottière, Chairman and Chief Executive of GTT Group.

“These tanks are the first of eight planned for the site and are already the largest onshore tanks in the world equipped with our GST® technology. We thank BGG and the Chinese government for their trust and wish HQCEC every success for this new terminal,” he declared.

GTT said its technology offered many advantages compared with a traditional onshore LNG tank.

This includes safer storage management through integrated monitoring and greater storage capacity for the same footprint.

“This milestone is the reward of five years of assessment, preparation, engineering and actual construction,” said Li Yalan, who is Chairwoman of the Beijing Gas unit of parent company Beijing Entreprises Group.

“We are proud to have evolved this emerging technology into a promising solution for many projects around the world,” added Li, whose is also the current President of the International Gas Union.

“Thanks to this world first, these containment membrane tanks are on their way to becoming the state-of-the-art in LNG storage. We have been impressed by the dedication and passion of GTT and HQCEC to make this world-first a success,” she stated.

While China’s estimated LNG imports dropped by 18.8 percent in 2022, the Beijing government is making plans to underwrite imported supplies of LNG, pipeline natural gas and coal during 2023 to guarantee power supplies.

China overtook Japan in 2021 to become the world’s largest LNG importer with 78.93MT of imports, though has now slipped back to see 2022 shipments totalling just 64.15 million, according to shipping data.

The shipments received at the Chinese network of 23 regasification terminals declined during the year because Covid-19 restrictions slowed up economic growth and energy demand.

Most of the imported cargoes in 2022 were handled by terminals operated by the state networks company PipeChina as well as the oil and gas majors China National Offshore Oil Corp., China Petroleum & Chemical Corp. (Sinopec) and China National Petroleum Corp.

According to energy consultancies such as UK-based Wood Mackenzie, Chinese imports are expected to rise again in 2023 to between 70MT and 72MT.

Energy bonds

China also announced a financing measure on January 6 under the 14th Five-Year Plan (2021-2025) to ensure energy supplies at state-owned power plants by providing more funding to purchase natural gas, oil and especially coal for power generation.

The State Assets Supervision and Administration Commission (SASAC) of the State Council said it would enable energy operators and power generation groups to issue 200 billion Chinese yuan ($29 billion) in special bonds to help finance and “fortify energy supply” in the country.

“These funds will be allocated to power plants in a timely manner so as to especially meet their coal needs this year,” said the state assets regulator .

“Centrally administered State-owned enterprises have generated 5 trillion kilowatt-hours of electricity since 2022, accounting for 63.1 percent of the country's total,” it added.

The SASAC said it was currently able to monitor the operations of 195 coal mines, 572 coal-powered plants, 727 hydro-electric plants and 96 gas-powered plants owned by state-owned enterprises (SOEs) across China.

“Since the end of September 2021, State Grid Corp of China and China Southern Power Grid, two central SOEs, have organized cross-regional and cross-provincial power support more than 3,000 times and transmitted nearly 50 billion kWh of electricity to places in need,” explained the SASAC .

“Ensuring sufficient coal, natural gas and oil supplies will be priorities for the government and central SOEs this year as imports of energy-related resources face various pressures such as high commodity prices,” added the statement.

Natural gas output by China’s energy majors surged over 7 percent on an annual basis to 189.99 billion cubic metres in 2022 while total stored stocks reached 17.72 Bcm, a 17.2 percent year-on-year increase.

JERA Co. Inc, Japan’s largest buyer of liquefied natural gas, has decided to resume operations in mid-April at the 47-year-old Sodegaura Thermal Power Station Unit 1, which uses regasified LNG and had been under a long-term planned shutdown process.

Hong Kong Electric, the former British colony’s main power company, said the first LNG import project in the territory now administered by China, including the world’s largest floating storage and regasification unit, will start operations in mid-2022.

China Petroleum and Chemical Corp., known as Sinopec, has been given the go-ahead by the state planning body to build another onshore LNG import terminal at Longkou in Shandong province at a cost of 8.3 billion Chinese yuan ($1.28Bln) and taking the size of nation’s network to 24 facilities.

China National Offshore Oil Corp, the Chinese major and largest LNG importer, has started production at the first deepwater natural gas field fully operated by a Chinese company.

CNOOC said the Lingshui 17-2 field started production in the South China Sea.

The field is expected to reach peak production of 328 million cubic feet of natural gas and 6,751 barrels of condensate per day by 2022.

CNOOC said the Lingshui 17-2 field would have 11 production wells when fully completed.

The new field would bring CNOOC's total gas production capacity in the South China to more than 13 billion cubic metres per annum, the equivalent of around 9.6 million tonnes per annum of LNG.

CNOOC said in its statement that Lingshui 17-2 was part of the company’s plan to significantly increase its gas output to cut carbon emissions over time.

In its LNG activities CNOOC has recently expanded the planned storage capacity from six tanks to 10 tanks for the Yancheng-Binhai Port import terminal now under construction in the eastern province of Jiangsu.

Phase one will have an annual receiving capacity of 3 MTPA and will be completed by 2022, including the first four 220,000 cubic metres full containment LNG tanks.

The company added that the Binhai LNG terminal project would also be an important asset in the industrial upgrade of the Yangtze River Economic Zone.

CNOOC has the largest regasification capacity of the Chinese majors with a presence in eight of the existing 22 import terminals, even after state-backed PipeChina bought and opened up several CNOOC-owned terminals to third-party access.

CNOOC also reportedly purchased almost a dozen additional LNG cargoes for delivery between July 2021 and March 2022 as demand in southern China is expected to remain strong as well as in the north and eastern industrial belts.

The Chinese liquefied natural gas market has been undergoing changes through market liberalization, offering more opportunities for international LNG portfolio holders such as BP of the UK, which has just entered China’s domestic wholesale gas supply market.

Gaztransport and Technigaz (GTT), the French technology firm and designer of liquefied natural gas storage tanks, is increasing its China business as it secured another contract for an onshore storage system in northeast Hebei province.

China National Offshore Oil Corp., the owner of nine Chinese LNG import terminals and multiple oil and gas stakes, has outlined its business strategy and development plan for 2020 with 10 new projects scheduled to come on stream.