Page 12 - AsianOil Annual Review 2021

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Sinopec chases new opportunities

in China’s expanding gas sector

The company has outlined an ambitious investment plan for the next five years as it seeks to
pivot towards LNG imports

EAST ASIA CHINA’S campaign to increase domestic natural looking to capitalise on the country’s rising
gas consumption in order to help achieve press- dependence on imports.
WHAT: ing environmental goals will leave the country
The company will invest heavily reliant on imports in the coming years . Sinopec strategy
nearly $31bn in its gas State-run Sinopec Corp. has announced Sinopec will set up a new gas subsidiary and
business by 2025. plans to invest CNY200bn ($30.93bn) over the increase its overall gas trading volume to 100bn
next five years in its natural gas business. The cubic metres by 2025 from 44.5 bcm in 2020,
WHY: company, which wants to more than double its Caixan quoted the chief engineer of the com-
Sinopec wants to more gas trading business by 2025, has signalled that pany’s existing gas business, Mou Haiyong, as
than double its gas the state majors’ biggest gas sector opportunities saying on May 5.
trading volume to 100 lie in building out LNG import capacity. He added that the company wanted to have
bcm by 2025. The pivot towards regasification termi- 10 LNG projects underway by 2025, with a total
nals comes after the Big Three majors – China receiving capacity of nearly 40mn tonnes per
WHAT NEXT: National Petroleum Corp. (CNPC), Sinopec and year (tpy), up nearly 200% on current capacity.
Limited domestic China National Offshore Oil Corp. (CNOOC) – The executive said Sinopec would also extend its
resources mean China’s were forced to sell their pipelines to state-owned network of feeder pipelines to 8,787 km, a 450%
reliance on LNG imports pipeline operator PipeChina last year. increase on its current length.
will soar. PipeChina was created in pursuit of a While the company saw modest growth in gas
national transmission strategy guided by a sin- production last year, Sinopec remains confident of
gular agenda rather than competing corporate delivering stronger growth figures in 2021.
interests. The company is supposed to improve Sinopec produced 1.1 trillion cubic feet
the prospects of both private and foreign invest- (31.15 bcm) of gas in 2020, up 2.3% year on
ment in the upstream as well as those of buyers year. Production in the first quarter, however,
at the other end. expanded by 16.8% y/y to 291.6bn cubic feet
The State-owned Assets Supervision and (8.26 bcm) and the company expects to produce
Administration Commission (SASAC) owns 34 bcm of gas this year – a 9.1% increase y/y.
the largest stake in PipeChina, at 30%, and sits The deputy head of Sinopec’s finance depart-
in the driver’s seat. ment, Song Zhenguo, said during a conference
Unable to profit from their midstream gas call on April 29 that production was projected
networks anymore, the Big Three are now to climb to 38 bcm in 2022 and 40 bcm in 2023.

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