China Approves First Floating Terminal For LNG Imports

By MarEx 2013-08-14 08:28:00

CNOOC has various subsidiaries that focus on LNG. The Shenzhen LNG project, above, is located at Longgang area, Diefupian District.

China National Offshore Oil Corp (CNOOC) said it had won final government approval to build China's first floating terminal for liquefied natural gas (LNG), a type of terminal that will allow it to increase imports rapidly.

China, the world's top energy consumer, aims to raise the share of natural gas in its energy mix to 8 percent by 2015 from 5 percent now to cut emissions from coal and lessen dependence on oil imports.

Domestic gas production is struggling to keep up, however, and imports will need to nearly double from 2012 to around 80 billion cubic metres (bcm) by 2015 to meet the target.

China's LNG imports rose 25 percent to 8.33 million tonnes in the first half of this year from the year-ago period, customs data shows.

The first phase of the floating LNG project in the northern port of Tianjin, costing 3.3 billion yuan ($539 million), is designed to have an annual receiving capacity of 2.2 million tonnes or 3.0 bcm, CNOOC Gas & Power Group said on its website on Wednesday.

"Compared with a normal LNG terminal, the floating LNG terminal in Tianjin can realise rapid LNG supply, shortening the construction period by three to four years," CNOOC said.

Floating storage and regasification services will be rented from overseas, it said.

The second phase of the project will lead to a normal onshore LNG terminal, with an annual receiving capacity of no less than 6.0 million tonnes, or 8.0 bcm, it said.

Natural gas from the terminal will supply Tianjin and Beijing as well as Hebei and Shandong provinces, it added.

CNOOC, China's leading firm in the LNG business, is operating four LNG terminals along the coastline and building several more to reach a total receiving capacity of 30 million tonnes a year.

China is operating six import LNG terminals, with a total receiving capacity of 21.9 million tonnes per year. Another dozen terminals with a capacity of 59.4 million tonnes per year have won government approval or have started construction.

The government is also liberalising its gas pricing regime, raising the price local distributors pay for gas for non-residential use by 15 percent in July, a move that will reduce the losses that gas producers and importers take on the fuel.

$1 = 6.1217 Chinese yuan 

Reporting by Judy Hua and David Stanway; Editing by Michael Perry and Jane Baird (C) Reuters 2013.