Page 11 - GLNG Week 15

GLNG ASIA GLNG
Shell, GCL considering Chinese LNG joint venture
PROJECTS & COMPANIES
A handful of privately owned Chinese firms are starting to move into LNG infrastructure development.
PRIVATELY owned Chinese company GCL Oil & Natural Gas has signed a framework agree- ment with super-major Royal Dutch Shell to explore a potential joint venture to market and trade LNG.
According to an announcement from GCL, the proposed joint venture would be based in eastern China. It would involve LNG supplies secured from Shell and marketed to a receiving terminal that GCL is planning to build in Jiangsu Province.
Reuters reported this week that a Shell spokeswoman had confirmed the agreement, but added that no further details had so far been provided by either of the companies involved.
However, a GCL strategic planning official, Huang Shaohua, told Reuters that the com- pany was intending to develop three receiving terminals along China’s east coast – Yantai in Shandong Province, Rudong in Jiangsu and Maoming in Guangdong. The three terminals will have a combined handling capacity of
14.5mn tonnes per year (tpy).
Yantai LNG was reported in March to have
received regulatory approval earlier this year (See GLNG Week 11). Huang said GCL was aiming to begin construction on the 5mn tpy facility later this year. Yantai is estimated to cost $1.1bn to build, and is due to enter service in 2023.
According to Huang, GCL submitted an investment plan for the 6.5mn tpy Rudong ter- minal to the state authority in December 2019. He also said the company was in discussions with state-owned PetroChina over the possibil- ity of joint investment in the 3mn tpy Maoming project.
GCL is a subsidiary of private energy and power firm GCL (Group) Holding. It is one of a handful of privately owned Chinese compa- nies that are moving into LNG infrastructure development. So far the country’s LNG industry has been dominated by the three leading state- owned firms – China National Offshore Oil Corp. (CNOOC), PetroChina and Sinopec.™
India’s gas demand tumbles during lockdown
PERFORMANCE
INDIA’S ongoing lockdown in response to the coronavirus (COVID-19) pandemic has seen industrial demand for natural gas plummet.
Enough numbers of consumers have asked Oil and Natural Gas Corp. (ONGC) to reduce their gas supplies for the state-run major to have slashed production by more than 15%, local newswire PTI quoted unnamed sources as say- ing on April 13.
ONGC’s sales have reportedly dropped from 50mn cubic metres per day prior to the start of the lockdown on March 25 to 40 mcm per day at present. This has driven the pro- ducer to cut output from 64.3 mcm per day to 53.4 mcm per day.
PTI said end-users had also asked state-run utility GAIL (India) to reduce supplies, result- ing in a drop in sales from about 115-120 mcm per day prior to the lockdown to 76 mcm per day. The newswire quoted one source as saying: “There is about 30% hit in the gas that is being transported through GAIL [India] pipelines.”
Most industrial consumers seeking changes in their supply are understood to be small businesses and city gas distributors. Retailer Indraprastha Gas, for example, has reportedly
shut two-thirds of its CNG retail pumps.
The nationwide 21-day lockdown was orig- inally slated to be lifted on April 14, but Indian Prime Minister Narendra Modi has opted to
extend it until May 3.
While Modi has acknowledged the economic
impact of the lockdown, he said the benefits out- weigh the cost. The president said: “We will have to keep a close and strict watch on the places which run the risk of becoming hot-spots. The creation of new hot-spots will further challenge our hard work and penance.”
Commenting on the extended lockdown, global energy consultancy Wood Mackenzie said: “India’s gas demand has been severely affected, primarily across the transport and industrial sectors. As a notoriously price-sensi- tive market, low oil prices are also a competitive threat to gas. High inventories are resulting in refiners further reducing margins for oil prod- ucts to compete with gas, leading to downside risk on the LNG demand outlook.”
It added that the forecast decline in LNG demand from India, the world’s fourth-largest importer, was “bad news for the already over- supplied LNG market”.™
Week 15 17•April•2020 w w w . N E W S B A S E . c o m P11