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month’s power demand, owing to a summer heat maritime emission rules, has encouraged Japa-
wave, is not expected to translate into lasting nese shipping companies to speed up develop-
support for LNG purchases, however. ment of LNG bunker options.
Japanese power and gas utilities’ high com- Kawasaki Kisen Kaisha (K-Line) named
mitment to long-term volumes is likely to stifle Japan’s first LNG bunkering vessel last week
buyer interest for additional volumes even if at Kawasaki Heavy Industries’ (KHI) Sakaide
winter temperatures are colder than expected, Works. Central LNG Marine Fuel Japan will use
Platts quoted unnamed market sources as say- the vessel, christened Kaguya on September 16,
ing in late August. to begin supplying LNG to ships in the Chubu
Japanese demand for LNG has been slowly region before the end of the year, K-Line said
tapering off in the wake of the country’s restart on September 18. Kaguya’s first supply opera-
of nuclear power generation, with nine reac- tions will involve the NYK-operated pure car
tors having been reactivated so far. The Japan and truck carrier (PCTC) vessel Sakura Leader,
Atomic Energy Commission has called for more which is the first large PCTC to be fuelled by
to be brought back online in order to reduce the LNG. The bunkering vessel will also supply a
country’s carbon emissions and stabilise power new car carrier that K-Line is set to deliver before
supplies. The situation, coupled with tighter the end of March 2021.™

PipeChina takes over Guangdong gas grid

PIPELINES & STATE-OWNED pipeline operator PipeChina network of pipelines, realising the central gov-
TRANSPORT has signed an agreement with the Guangdong ernment’s ambition of separating the upstream
Provincial government to take over the local from the midstream. PipeChina paid $56bn
natural gas grid. in July for China National Petroleum Corp.
The agreement signed in Beijing will see (CNPC), Sinopec and China National Offshore
PipeChina operate the province’s trunk gas lines Oil Corp.’s (CNOOC) assets. The three majors
– as well as receive an equity stake in the assets – also received minority stakes in the pipeline
in exchange for investing in the network, the offi- operator.
cial Xinhua news agency reported on September The central government had two clear goals
24. The state company intends to lay six trunk in consolidating control of China’s state-owned
lines spanning 751 km in Guangdong this year. pipeline network. One was to improve the pros-
PipeChina was created in December 2019 to pects of private and foreign investment in the
take control of the Big Three oil and gas majors’ upstream by guaranteeing a level playing field
in terms of accessing export capacity. The other
was to develop a national transmission strategy
built around a singular agenda rather than com-
peting corporate interests. This motivator will
be of increasing importance as the government
continues to push for coal consumption to be
switched off in favour of gas.
Although gas demand growth slowed during
the height of the coronavirus (COVID-19) pan-
demic, consumption has picked up in line with
the country’s economic rebound.
Liquefied natural gas (LNG) and piped gas
imports climbed 16% year on year in August to
5.96mn tonnes, according to General Adminis-
tration of Customs (GAC) data.
Pipeline gas deliveries were the biggest win-
ner, rising for the first time since February. Pipe-
line imports climbed 8% to 3.4mn tonnes.
Low spot LNG prices are thought to have
encouraged the uptick in imports, while take-
or-pay obligations in piped gas contracts are also
suspected to have played their part, Argus Media
quoted unnamed market participants as saying
on September 23.™

Week 38 24•September•2020 www. NEWSBASE .com P9