LNG

ENN Group, the leading non-state energy company in China with LNG and growing city-gas assets, reported a more than 18 percent jump in first-half profits as revenues soared, boosted by increased business in LNG and in expanding retail, wholesale and industrial gas supply markets.

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.

Chinese liquefied natural gas imports increased in May compared with the year-ago period as new regasification facilities are planned, including in Hong Kong.

LNG shipments in May were 4.43 million tonnes, lower than in the previous month’s 4.54MT, though higher by 6.90 percent than the 4.15 MT received in May 2018.

LNG imports for the first five months of 2019 rose 20.3 percent from a year earlier to 23.87MT, according to the nation's General Administration of Customs.

China imported a total of 4.54MT of LNG in April 2019 compared with 3.39MT in April 2018, a rise of 33.9 percent.

The total of LNG imports for the January-May period was given as 23.88MT versus19.87MT in January-May 2018, an increase of about 20.3 percent.

Among the main suppliers of shipments to China in May 2019 were nations such as Qatar, Australia, Indonesia and Nigeria.

China’s National Development and Reform Commission has also been working to encourage companies to expand the gas pipeline network, improve gas storage and is now seeing results in enabling the system to meet peak demand when required.

That’s as Hong Kong Electric Co. and Castle Peak Power Co., two local power companies in the autonomous Chinese territory, said they had signed a supply deal for the former British colony’s first imports of LNG and for the charter of a floating storage and regasification unit.

Hong Kong is moving to use more natural gas to fuel its electric power generation instead of coal or oil.

Both Hong Kong-based power companies said they have signed an agreement with Shell Eastern Trading, a unit of Royal Dutch Shell, for a long-term LNG supply for the Hong Kong Offshore LNG terminal.

Shell will supply around 1.2 million tonnes per annum of LNG to both companies from its global LNG portfolio once the project has been completed.

Castle Peak Power and Hong Kong Electric said that their joint venture had signed an agreement with Japanese shipping line Mitsui OSK Lines to charter an FSRU.

Chinese liquefied natural gas imports increased last month by almost 34 percent compared with the same month of 2018 amid a slump in spot cargo prices and overall demand.

China imported a total of 4.54 million tonnes of LNG in April 2019 compared with 3.39MT in April 2018, a rise of 33.9 percent over the same month a year ago, according to the nation's General Administration of Customs.

The total of LNG imports for the January-April period was given as 19.45MT, an increase of 40.3 percent for the fourth-month period year-on-year.

The shipments were encouraged by lower LNG cargo prices for North Asia of under $6.00 per million British thermal units for April 2019.

Chinese LNG imports had risen 25 percent in March compared with the same month a year ago as the nation has also begun to improve its natural gas storage facilities to help meet peak demand.

The March LNG imports were 4.06MT versus 3.25MT in March 2018. Prices in March 2019 had been above $6.00 per MMBtu before dropping at the end of the month.

Among the main suppliers of shipments to China in April 2019 were nations such as Qatar, Australia, Indonesia and Nigeria.

Among the high volume of Australian cargoes, the 74,100 cubic metres capacity carrier “Cesi Gladstone” unloaded a shipment on April 13 at the Chinese Tianjin onshore terminal, operated by Sinopec, from the Australia-Pacific export plant in Queensland.

China’s National Development and Reform Commission has been working to encourage companies to expand the gas pipeline network, improve gas storage and is now seeing results in enabling the system to meet peak demand when required.

China generally uses depleted or abandoned gas fields and reservoirs to build underground storage as they are more effective and economical compared with spherical tanks above ground.

The state-owned major, China Petroleum & Chemical Corp., also known as Sinopec, has now started sending natural gas imported at its Tianjin LNG terminal east of Beijing, to the newly-built Wen 23 underground gas storage facility at Puyang in northern Henan province.

The Wen gas storage was part of the China's 13th Five-Year Plan to benefit Hebei and Henan provinces and was rebuilt from an exhausted gas field and put into operation in mid-March 2019.

Sinopec said that the storage is connected to its own Ordos-Anping-Cangzhou gas pipeline, which is 700 kilometres long and includes one trunk line and two branch lines linking eight cities and 23 counties. The pipeline has been in commercial operation since November 2018.

The underground storage gives Sinopec's gas supply optionality and flexibility during peak demand in northeast China.