Page 9 - AsianOil Week 08 2022

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Shell, PipeChina sign terminal use agreement

PROJECTS & SUBSIDIARIES of Shell and China Oil & Gas companies – in late 2021. The contracts will be
COMPANIES Pipeline Network – known as PipeChina – have effective from April.
signed a memorandum of co-operation (MoC) The new deals make Shell the first interna-
and two terminal use agreements. tional oil company (IOC) to sign a terminal
The terminal user agreements with Shell user agreement with PipeChina, which is in
Energy (China) are for two LNG receiving facil- the process of opening up its terminals to third-
ities – Yuedong LNG and Beihai LNG – for this party access. The deals are also seen as illustrat-
year. Under the MoC, the two parties will col- ing the gradual liberalisation of China’s natural
laborate in the use of PipeChina’s LNG receiv- gas industry, and more LNG traders could now
ing terminal slots in the long term, a PipeChina follow Shell in directly bidding for access to the
subsidiary said. country’s LNG terminals.
PipeChina is expected to contribute its PipeChina was formed in 2019 to acquire
domestic terminal operations expertise to the pipelines and LNG terminals from the country’s
partnership, while Shell will provide access state-owned energy giants. It currently oper-
to its international gas portfolio, according ates seven LNG import terminals with a total
to comments made by subsidiary PipeChina receiving capacity of 27.6mn tpy. This accounts
LTMC. for nearly one-third of China’s total LNG receiv-
Last year, Shell struck a deal with QatarEn- ing capacity, according to the company. It is also
ergy – which was then known as Qatar Petro- constructing three additional import terminals
leum – to supply 1mn tonnes per year (tpy) of – Shandong Longkou, Fujian Zhangzhou and
LNG to China over a 10-year period. Shenzhen Diefubei.
Prior to the Shell deals, PipeChina awarded The company anticipates that bringing
LNG receiving terminal slots for a period of these terminals online will benefit more third-
5-20 years to 14 applicants – all of them Chinese party users.™

Aramco keen on Chinese investment

amid refinery reports

INVESTMENT SAUDI Aramco’s President and CEO this week increasing the number of crude outlets dedicated
confirmed that the company is considering to its crude production, Aramco intends to sup-
investments in China amid recent reports that it ply 70% of the facility’s feedstock, taking a 35%
has resumed talks for the development of a refin- stake in the project, with Norinco subsidiary
ery in the country. Huajin holding 36% and the local-government
Speaking during this week’s International owned Sincen the remaining 29%.
Petroleum Technology Conference (IPTC) in The Saudi firm’s participation came to an end
Riyadh, Amin Nasser told local media: “China in 2020 when it slashed capital expenditure in
is an important part of the sector. Definitely, we response to low oil prices and the coronavirus
are looking for more investment in China. And (COVID-19) outbreak, and its stake was trans-
we are currently in discussions with a number of ferred to Huajin, which established a joint ven-
our partners in China.” ture with Sincen late that year.
He did not provide any further information Quoting sources close to the project, Argus
about ongoing conversations, but recent reports Media said that the JV kicked off construction
cited company officials as saying that Aramco of the facility in Q3 2021, with the petrochemical
has resumed talks to build a $10bn refining and units having now been expanded to a planned
petrochemicals complex at Panjin in north-east- 1.65mn tpy of ethylene and 2mn tpy of paraxylene,
ern China’s Liaoning Province. raising the cost of the project to just under $12bn.
Originally announced in 2017 as part of While the talks may yet have a long way to
China’s One Belt, One Road international infra- go, it appears that Aramco is once again pressing
structure initiative, Aramco agreed a deal with ahead with its long-held strategy of raising its
China North Industries Group Corp. (Norinco) gross global refining footprint to 8-10mn bpd.
for the development of facilities with a projected Should it assume the 35% stake it handed back
refining capacity of 300,000 bpd alongside to Huajin in 2020 – and complete several other
1.5mn tonnes per year of ethylene and 1.3mn planned downstream deals (see table) – the Pan-
tpy of paraxylene. jin facility would take Aramco’s gross refining
In line with the company’s strategy of capacity beyond 7.8mn bpd.™

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