LNG

China National Offshore Oil Corp., the largest liquefied natural gas terminal owner, is planning to open up several of its facilities to third-party access (TPA) and expressions of interest are required by the end of March in the proposal backed by the Shanghai Petroleum and Natural Gas Exchange.

The initiative by CNOOC and the Shanghai Exchange are part of a series of natural gas market reforms to back increasing demand for imports to support both economic development and the government’s clean air policies.

The Shanghai Petroleum and Natural Gas Exchange was inaugurated in November 2016 after a year-long trial operation as part of energy reforms in China.

CNOOC, owner of nine of China's 19 onshore import terminals, sold imported LNG for the first time on the exchange in April 2018 for forward delivery.

Under the Chinese TPA plans, each third-party user must take in a minimum of four cargoes, equivalent to 260,000 tonnes per annum, over 10 years.

A statement by the Shanghai exchange said that this requirement may be increased in multiples of four cargoes.

“The long-term TPA could be granted to more than one company, while there were no firm rules yet on the amount,” according to the statement.

Analysts said that while the initiative opens the way to allow more independent buyers to enter the market, there was concern about having to lock in third-party customers in terms of price and volumes for a 10-year term.

Expressions of interest have to be submitted by March 31. The exchange said subsequent negotiations would then take place in April and May on pricing and delivery details.

During a trial for the process held in 2018 by CNOOC and the exchange, TPA was offered at the Yuedong LNG terminal in the southern province of Guangdong at the end of October and at the Ningbo facility in the eastern Zhejiang province in November.

The Chinese proposal is a move towards the policies of the European Union requiring member states to provide open access to gas infrastructure, including LNG terminals.

The conditions and tariffs of TPA to regulated LNG terminals in Europe must be published by terminal operators as well as approved by the national regulator.

However, in the Europe market exemptions to the regulated TPA regime have been granted to six major operating terminals: three in the UK, the Isle of Grain, Dragon LNG and South Hook facility, one in France at Dunkirk LNG, one in Italy at the Adriatic terminal and one in the Netherlands at Gate LNG in Rotterdam.

China has imported another record total of LNG in 2018 as more winter natural gas supplies were brought to the northern cities such as Beijing to help reduce coal use and improve air quaity, aided by warmer seasonal temperatures that cut heating needs.

Among the final shipments of 2018, carriers were unloading their cargoes on December 31 from nations such as Australia, Indonesia and Nigeria.

Chinese imports had surged in the January-November period by 43.6 percent to 47.52MT and have also reached record levels in December 2018.

According to shipping data and estimates, LNG imports to China through December 22, had risen to more than 6.5MT and were expected to break the 7.5MT mark by year-end.

That would put China’s total of LNG imports in 2018 at around 56MT versus just over 39MT in 2017, second only to Japan’s 83.52MT.

China had imported 5.9MT in November 2018, surpassing the previous monthly record of 5.18MT set in January 2018, according to data from the country's General Administration of Customs.

The imports of LNG had risen by around 46 percent in 2017 from the previous year when shipments had amounted to just over 27MT.

LNG carriers from Australia, the Middle East and Africa are still heading in significant numbers for Chinese import terminals with January shipments to be regasified at its network of 20 import facilities.

In addition to its 19 onshore terminals, China has also deployed the floating storage and regasification unit, the 170,000 cubic metres capacity “Hoegh Esperanza”, at Tianjin port in northeast China to serve Beijing.

Analysts said the Chinese government had largely succeeded in its pledge to ensure abundant natural gas supplies and stable prices this winter as previous large-scale coal use was being replaced as far as possible by natural gas to improve air quality.

China’s National Development and Reform Commission had also unveiled measures to work on expanding the gas pipeline network, improve gas storage and make arrangements to meet peak demand.

The 155,000 cubic metres capacity LNG carrier “GasLog Santiago” was delivering one of the final shipments of 2018 from Australia.

The vessel was unloading its cargo on December 31 at the Ningbo terminal, owned by China National Offshore Oil Corp. in eastern Zheijang province, from the Queensland Curtis plant near Gladstone.

The 152,500 cubic metres capacity vessel “Seri Bakti”, owned by Malaysian shipping line MISC, was unloading an Indonesian cargo on December 31 at the port of Tianjin, east of Beijing.

Among African cargoes, the 141,000 cubic metres capacity “LNG Akwa Ibom” was delivering an Nigerian shipment on December 31 to the Mengtougou terminal operated by Shanghai Gas.

Sept 25 (LNGJ) - The 150,000 cubic metres capacity vessel “Hoegh Esperanza” is scheduled to unload a cargo on September 25 at the Chinese Ningbo terminal in Zhejiang province from the Queensland Curtis plant in Gladstone, Australia. The 173,400 cubic metres capacity carrier “Murex” was unloading a shipment on September 26 at the Tangshan terminal in northern China from the Wheatstone plant operated by Chevron in Western Australia. The 147,000 cubic metres capacity vessel “Min Rong” will deliver a shipment on September 28 to the Fujian terminal from the Tangguh export plant in Indonesia, operated by BP. The 215,000 cubic metres capacity Q-Flex vessel “Al Utouriya” is scheduled to deliver a cargo on September 29 to the Shenzhen terminal in southeast China from Ras Laffan in Qatar. The 174,100 cubic metres capacity carrier “Cesi Gladstone” will unload a shipment on October 3 at the Chinese Tianjin terminal, owned by Sinopec, from the Australia Pacific plant at Gladstone in Queensland. The 174,000 cubic metres capacity carrier “Maran Gas Ulysses” will deliver a cargo on October 2 to the Yung-An terminal in Taiwan from the Gorgon plant on Barrow island in Western Australia.

April 3 (LNGJ) - The 173,400 cubic metres capacity carrier “Ribera del Duero Knutsen” has docked at the Chilean import terminal at Mejillones port with a cargo from the US Sabine Pass export facility in Louisiana, owned by Cheniere Energy. The 152,300 cubic metres capacity carrier “Seri Bakti”, operated by Malaysia International Shipping Corp., has docked at the Chinese Ningbo import terminal in Zhoushan port with a shipment from the Gladstone LNG plant on Curtis island in Queensland, Australia. The “LNG Niger River” was unloading a shipment on April 3 at the Hazira import terminal, operated by Shell India, from the Nigeria export plant on Bonny Island. The 177,000 cubic metres capacity vessel “Energy Horizon” has docked at the Japanese Sodegaura import terminal with a cargo from the Dampier facility in Western Australia for Pluto LNG, operated by Woodside Petroleum.

Dec 1 (LNGJ) – The 170,000 cubic metres capacity “Methane Julia Louise” was unloading a cargo on December 1 at the Chinese Zhuhai import terminal in Guangdong province from the Queensland Curtis LNG plant in Australia owned by Shell, according to shipping data. The 173,400 cubic metres capacity vessel “Maran Gas Roxana” has just unloaded a shipment at the PetroChina-owned Dalian import terminal in northeast Liaoning province from the Gladstone LNG plant in Australia. The 145,000 cubic metres capacity carrier “Methane Lydon Volney” is scheduled to deliver a shipment on December 12 to the Ningbo terminal in the eastern province of Zhejiang, owned by China National Offshore Oil Corp., from Shell’s QCLNG plant in Gladstone. The 165,500 cubic metres capacity carrier “Woodside Donaldson” is scheduled to arrive on December 16 at the Taiwanese Yung-An import facility with a cargo from the Dampier export terminal in Western Australia, operated by Woodside Petroleum.

June 29 (LNGJ) - The 155,000 cubic metres capacity carrier “Gaslog Sydney” will unload a cargo on July 2 at the Ningbo import terminal in eastern China’s Jiangsu Province, operated by China National Offshore Oil Corp., from the Queensland Curtis plant in eastern Australia, according to shipping data. The 174,000 metres capacity vessel “Gaslog Greece” will deliver a shipment on July 10 to the Yung-an import terminal in Taiwan from the Bonny Island plant in Nigeria. The 145,700 cubic metres capacity carrier “LNG Benue” will deliver a shipment on July 6 to the Huelva import terminal in southwest Spain from the Bonny Island plant in Nigeria.

The US is currently shipping its second liquefied natural gas cargo to an import terminal in China as the Sabine Pass export plant in Louisiana heads for record shipments with three Trains completed.