Page 6 - GLNG Week 19 2021

GLNG COMMENTARY GLNG

Sinopec chases new opportunities

in China’s expanding gas sector

The Chinese company has outlined an ambitious investment plan for the next five years as

it seeks to pivot towards LNG imports

INVESTMENT 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 plans Sinopec will set up a new gas subsidiary and
business by 2025. to invest CNY200bn ($30.93bn) over the next increase its overall gas trading volume to 100bn
five years in its natural gas business. The com- cubic metres by 2025 from 44.5 bcm in 2020,
WHY: pany, which wants to more than double its gas Caixan quoted the chief engineer of the com-
Sinopec wants to more trading business by 2025, has signalled that the pany’s existing gas business, Mou Haiyong, as
than double its gas state majors’ biggest gas sector opportunities lie saying on May 5.
trading volume to 100 in building out LNG import capacity. He added that the company wanted to have
bcm by 2025. The pivot towards regasification terminals 10 LNG projects underway by 2025, with a total
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 national While the company saw modest growth in
transmission strategy guided by a singular gas production last year, Sinopec remains con-
agenda rather than competing corporate inter- fident of delivering stronger growth figures in
ests. The company is supposed to improve the 2021.
prospects of both private and foreign invest- Sinopec produced 1.1 trillion cubic feet (31.15
ment in the upstream as well as those of buyers bcm) of gas in 2020, up 2.3% year on year. Pro-
at the other end. duction in the first quarter, however, expanded
The State-owned Assets Supervision and by 16.8% y/y to 291.6bn cubic feet (8.26 bcm)
Administration Commission (SASAC) owns and the company expects to produce 34 bcm of
the largest stake in PipeChina, at 30%, and sits gas this year – a 9.1% increase y/y.
in the driver’s seat. The deputy head of Sinopec’s finance depart-
Unable to profit from their midstream gas ment, Song Zhenguo, said during a conference
networks anymore, the Big Three are now call on April 29 that production was projected

P6 www. NEWSBASE .com Week 19 14•May•2021