Page 9 - GLNG Week 41 2021

GLNG ASIA GLNG

ENN, Cheniere seal long-term supply deal

PROJECTS & CHINESE utility ENN Natural Gas has signed a While China’s demand for LNG has been
COMPANIES new long-term LNG supply agreement with the increasing steadily, consumption is set to sky-
US’ Cheniere Energy. rocket in the coming months amid a deepening
The Chinese company said on October 11 power supply crunch. The country is grappling
that Cheniere had agreed to supply 900,000 with coal and gas shortages that have left two-
tonnes per year (tpy) of the fuel for 13 years thirds of the country’s provinces rationing power.
from July 2022 on a free-on-board (FOB) basis. China’s coal-to-gas transition has created an
Cheniere said the purchase price was indexed to imbalance within the power sector, leading to
the Henry Hub price and included a fixed lique- soaring coal prices that have left power gener-
faction fee. ators unwilling to operate at full capacity. The
The US company’s president and CEO, Jack government has long banked on a shift to clean-
Fusco, said the sale and purchase agreement er-burning gas to help fulfil its pledge to hit peak
(SPA) was a “milestone” in its efforts to sign carbon emissions by 2030 and achieve carbon
long-term supply contracts ahead of its final neutrality by 2060.
investment decision (FID) on the third stage of ENN chairman Wang Yusuo: “China is
its Corpus Christi LNG export terminal on the making great efforts to achieve the goal of peak
Texas Gulf Coast. The FID is expected in 2022. carbon emissions and carbon neutrality, boost-
Fusco said: “This SPA underscores the ing the reform of the natural gas market, and
strength of the global LNG market today, par- accelerating the structural adjustment of energy
ticularly in China.” consumption.”
China is widely expected to overtake Japan The executive added that he expected the two
this year as the world’s largest importer of LNG, companies to develop a strategic relationship that
having imported 76.1mn tonnes of the fuel in the would allow ENN to provide its clients with “high
12 months to June 30. This figure was up 19.6% quality resources and services, and to make posi-
year on year from the 63.6mn tonnes of imports tive efforts to the realisation of peak carbon emis-
recorded in the previous 12-month period. sions and carbon neutrality in China”.™

China’s gas imports soar

amid oil delivery slump

PERFORMANCE CHINA’S imports of natural gas climbed in Sep- prices by drawing on commercial and strategic
tember to their highest point since the start of the reserves, combined with power curbs in the
year even as shipments of crude oil plummeted. industrial sector that cut into fuel demand, took
The country imported 10.62mn tonnes of a toll on crude oil imports,” Reuters quoted SIA
piped gas and liquefied natural gas (LNG) last Energy senior director Seng Yick Tee as saying.
month, 22.6% year on year, according to General The government’s crackdown in April, mean-
Administration of Customs (GAC) data pub- while, has put persistent downwards pressure
lished on October 13. Oil imports, meanwhile, on demand. The central government has not
contracted by 15.3% on the year to 41.05mn only focused on teapot crude quota trading but
tonnes (10.03mn barrels per day). has also extended its gaze to the state majors’
In the first nine months of the year, the coun- non-compliant crude supply to independent
try’s gas imports climbed 22.2% y/y to 89.85mn refiners.
tonnes, while oil imports slumped 6.8% y/y to Gas purchases have soared, meanwhile, amid
387.4mn tonnes (10.4mn bpd) a deepening power supply crunch that has left
China’s oil imports have slowed this year for a around two-thirds of the country rationing its
mixture of reasons, including mounting invento- power. Despite gas prices reaching record highs,
ries, rising international oil prices and the central the government has directed the country’s
government’s crackdown in April on the illicit importers to ramp up their purchases regardless.
trading of crude imports. Privately owned ENN Natural Gas signed this
Companies are understood to have drawn week a new long-term LNG supply agreement
down their crude inventories in the face of strong with the US’ Cheniere Energy that will see the
international oil prices, with the Brent bench- latter supply 900,000 tonnes per year (tpy) of
mark currently trading at $80-85 per barrel. the fuel for 13 years from July 2022 on a free-on-
“China’s ambitions to cool commodity board (FOB) basis.™

Week 41 15•October•2021 www. NEWSBASE .com P9