LNG

China National Offshore Oil Corp. (CNOOC), the Chinese energy major with international and domestic LNG interests, said the first ultra-deep natural gas well in the Bohai Sea offshore northeast China had out-performed initial estimates amid ambitious domestic gas production plans.

Chinese natural gas imports, including LNG and pipeline natural gas, dropped by 9.5 percent in the first nine months of 2022 as the economy slowed while China paid over 40 percent more for its gas during the period.

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.

China National Offshore Oil Corp, the owner of nine Chinese LNG import terminals, is pressing ahead with the Lingshui natural gas field development in the South China Sea that will become one of the main drivers of the company’s gas production in the 2020s.

LNG and energy engineers Petrofac and TechnipFMC have been awarded separate large contracts to boost China’s energy supplies from the Liuhua oil and gas fields located near the Pearl River Basin, about 300 kilometres southeast of Hong Kong.