PetroChina posts wider first-half net losses but believes the worst is over as demand picks up

Tuesday, 08 September 2020
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LNG Journal editor:

PetroChina posted a wider first-half overall net losses and falling revenues, including on imports of LNG and pipeline gas, but said it was optimistic for rest of 2020 on Chinese domestic demand.

The state-controlled Chinese major said in a Web-based earnings presentation that first-half net losses came to 29.98 billion Chinese yuan ($4.39Bln), of which the loss in the second quarter narrowed compared with the first quarter, “indicating a steady improvement in business” trends.

Export projects

PetroChina is the Hong Kong-listed affiliate of China National Petroleum Corp. (CNPC) and has LNG project stakes in Mozambique and Canada.

The company said first-half revenues dropped to 929.04Bln yuan ($136.06Bln), representing a year-on-year decrease of 22.3 percent.

However, the Exploration and Production segment, one of the company’s four divisions, achieved an operating profit of 10.35Bln yuan ($1.51Bln).

The three other operating segments of the Group consist of Refining and Chemicals, Marketing and Natural Gas and Pipeline.

International operations do not constitute a separate operating segment of the Group.

The Marketing division recorded an operating loss of 12.89Bln yuan ($1.88Bln), while the Natural Gas and Pipeline segment achieved an operating profit of 14.37Bln yuan ($2.10Bln).

This was 21.5 percent lower that the 18.30Bln yuan ($2.68Bln) operating posted in the first six months of 2019.

PetroChina said sales volumes of imported natural gas and LNG recorded a net loss of 11.83Bln yuan ($1.73Bln), representing an increase in losses from last year of RMB631M yuan ($92.4M) in the six months.

“Under the influence of Covid-19 and the macroeconomic downturn, global natural gas market demand declined, while the international natural gas prices dropped across the world and LNG spot prices in Europe, America and Northeast Asia hit record lows,” said PetroChina.

PetroChina operates three important Chinese LNG import terminals at Dalian and Tangshan in the northeast of the country and at Rudong in the central Jiangsu province in the coastal area near Shanghai.

PetroChina additionally receives natural gas pipeline supplies from the Central Asian states of Turkmenistan, Kazakhstan, Uzbekistan as well Russia through CNPC.

“The growth of demand for domestic natural gas slowed down and output of natural gas continued to increase relatively rapidly, while the growth of imports of natural gas declined substantially,” it added.

PetroChina said that in the first half, the overall domestic consumption of natural gas amounted to 155.6 billion cubic metres, representing an increase of 4.2 percent compared with the same period of last year.

Domestic natural gas output amounted to 95.0 Bcm, an increase of 9.9 percent versus the same period last year.

It noted that first-half Chinese imports of natural gas, both pipeline and LNG, amounted to 66.7 Bcm, representing a rise of 3.3 percent compared with the first half of 2019.


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