LNG

PetroChina, the Chinese major listed in Hong Kong and with LNG and international assets, reported plunges in annual revenues and net profits of over 20 percent and 57 percent respectively as it was hit by the effects of Covid-19 and the economic slowdown.

The London-based Baltic Exchange is starting its first full week of issuing independent indices for liquified natural gas propulsion fuel, based on vessels burning LNG rather than marine fuel oil or marine gas oil as their primary fuel.

Pavilion Energy, the subsidiary of Singapore wealth fund Temasek, said its trading unit had signed an agreement with US major Chevron Corp. for the Asian city state to receive LNG shipments for six years with emissions measured along the value chain.

China’s National Development and Reform Commission (NDRC), the nation’s economic planning body, has urged energy companies to increase imports of liquefied natural gas and thermal coal for power generation as colder weather hits northern China around the capital Beijing and is forecast to last for weeks.

China Petroleum and Chemical Corp. (Sinopec), one of the largest LNG importers, said it would seek more volumes on the spot market.

Sinopec and PetroChina, the Hong Kong-listed affiliate of China National Petroleum Corp. and another LNG importer, have also said they would be increasing shale-gas production under five-year plans.

Sinopec, a shareholder in the Australia-Pacific LNG plant in Queensland operated by ConocoPhillips, said its regasification terminals at Tianjin Port in the north and the east China Qingdao facility would both handle record volumes in January.

The company said it would also increase domestic natural gas production by another one million cubic metres per day by the end of January by accelerating the drilling of new development wells.

Sinopec said it was additionally extracting gas from its underground storage in central and east China, while maintaining high inventories at LNG storage tanks.

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

Another record of LNG volumes is forecast to be announced for December. China’s November imports amounted to 6.61 million tonnes, 2.4 percent from a year earlier, while Japan’s November shipments came to 6.02MT.

For the first 11 months of the year, China received shipments totalling 59.54MT, an increase of 10.7 percent compared with the same period of 2019.

November 2020 is the fifth time that China had taken the position of the largest LNG importing country on a monthly basis, following November 2019 and May, June and August 2020.

China’s main LNG suppliers are Australia, Qatar, Malaysia, Indonesia, Russia and the US.

At the same time, PetroChina and Sinopec are planning to increase their shale-gas output over the next several years from the Sichuan shale basin in central China.

PetroChina aims to more than double shale gas production in Sichuan to more than 22 billion cubic metres by 2025.

That will surpass a target set by Sinopec, which led China’s shale gas development with the first commercial discovery at Fuling in Sichuan, from the current 7.5 Bcm of output to 13 Bcm by 2025.

Sinopec has added 83 Bcm of newly proven reserves that have yet to enter production at the Chuanxi field in Sichuan.

The reserves, certified by the Chinese Ministry of Natural Resources, raise the field’s total proven resources to 114 Bcm.

The reservoir is spread over 138 square kilometres in the western part of the basin at depths of 6,000 metres.

However, shale gas output is limited in China in that by 2025 the total annual production by Sinopec and PetroChina combined would only amount to the LNG shipments from one large US Gulf Coast LNG export plant.

PetroChina’s shale operations are centred in the Yibin, Zigong, Neijiang, Luzhou and Yongchuan regions of the Sichuan Basin.

The company started appraising shale gas blocks in the Sichuan basin in 2006 and made its first major discovery with the Wei-201 well in 2010.

Around 102 LNG shipments were being lifted this week versus 91 last week at global liquefaction plants as the US saw 14 cargoes departing from its facilities and the North Asia spot LNG price moved above the $6.87 mark, while US and European natural gas benchmarks hit $2.98 per MMBtu and $5.65 per MMBtu respectively.

Australian nine-month liquefied natural gas export totals are higher than last year even amid plant outages and the Covid-19 pandemic, putting the nation on track to cement its position as world No. 1 exporter ahead of Qatar.

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.

Dominion Energy’s Cove Point LNG export plant at Chesapeake Bay in Maryland has been closed for about three weeks for its annual maintenance and when it comes back on stream it will be closer to coming under the control of US investor Warren Buffett.

A group of Japanese utilities and energy companies will be receiving more liquefied natural gas volumes for the Soma LNG terminal after the new Fukushima Natural Gas Power Plant started to generate electricity at full capacity from its two units in the prefecture where the nuclear plant exploded during an earthquake and tsunami in 2011.

Woodside Petroleum, the Western Australia LNG operator, said its half-year earnings would include non-cash, post-tax impairment losses of US$4.37 billion, including for its sales contract with Cheniere Energy’s Corpus Christi LNG plant in Texas.