LNG

China Petroleum & Chemical Corp., known as Sinopec, has signed a cargo supply deal with QatarEnergy to receive 4 million tonnes per annum of cargoes from the Ras Laffan plant in the Arabian Gulf from 2026.

Chinese LNG imports have slumped in 2022 so far and they have been offset by increasing pipeline natural gas imports from the Central Asian states of the former Soviet Union.

Chinese LNG imports dropped by almost 18 percent in March to their lowest level in two years as Covid-19 shutdowns in cities such as Shanghai curbed economic and industrial activity as well as fuel demand and led to Japan overtaking China as the largest North Asian importer last month.

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.

Chinese liquefied natural gas imports soared last month along with the nation’s domestic natural gas production as industrial and power needs kept pace with economic growth.

Chinese liquefied natural gas imports rose by a third in March 2021 from the same month in 2020 when the world’s second-largest importer was cancelling cargoes because of the economic slowdown caused then by the impacts of Covid-19 in China.

Gaztransport and Technigaz, the French technology and engineering company for LNG storage, has signed an additional cooperation agreement related to the Tianjin Nangang LNG import terminal currently being developed in northeast China.

GTT and the developer, Beijing Gas Group, said their accord is for collaboration for the phase II and phase III parts of the terminal construction beyond phase 1 covered by the current agreement.

The second and third phases of the Tianjin Nangang construction will include building six additional storage tanks, each of 220,000 cubic metres capacity.

This agreement was signed at a ceremony held at the French Embassy in Beijing in the presence of French Ambassador Laurent Bili, Chairman of Beijing Enterprises Group Tian Zhenqing and Li Yalan, Chairwoman of the board of Beijing Gas, along with Adnan Ezzarhouni, General Manager of GTT in China.

“I am convinced that GTT, a company of excellence in the field of natural gas, has a great future in China, which has resolutely embarked on the path of energy transition,” state French Ambassador Bili.

The first firm agreement for Tianjin Nangang LNG followed a November 2019 accord between GTT and Beijing Gas on the occasion of the presidential visit to China of French President Emmanuel Macron for talks with his Chinese counterpart Xi Jinping.

GTT subsequently received an order in June 2020 for the design of two 220,000 cubic metres capacity membrane tanks.

Built as part of the Tianjin Nangang project, located east of the capital Beijing, these two tanks when completed will be the largest in China.

“In this new agreement, GTT will also support Beijing Gas in upgrading the National Standards of LNG onshore tanks,” explained GTT.

Beijing Gas Chairwoman Li Yalan said the Tianjin Nangang LNG project was progressing smoothly.

“I hope Beijing Gas and GTT continue to strengthen their cooperation and jointly promote the adoption of the lower carbon footprint membrane full containment technology among Chinese gas companies,” added Li.

The Tianjin Nangang terminal will be the third serving 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 a separate floating terminal provided by Norway’s Höegh LNG in the form of a floating storage and regasification unit on long-term charter to China National Offshore Oil Corp. (CNOOC).

“We are very pleased to extend our partnership with Beijing Gas, proof that the membrane full containment technology meets expectations in terms of technological performance, cost competitiveness and level of safety,” stated Philippe Berterottière, Chairman and Chief Executive of GTT.

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.

Chinese liquefied natural gas imports soared to a record in November and surpassed the monthly total of shipments received by Japan, the world’s largest LNG importer.

China likely imported a record 61 million tonnes of LNG during 2019, a 13.5 percent increase on the previous year and consolidating its position as the No. 2 importer after Japan and ahead of South Korea.