Page 15 - GLNG Week 23

GLNG ASIA GLNG

China reportedly consolidating LNG terminals

POLICY THE Chinese government has reportedly Another source told Caixin that a group of
ordered the country’s three largest state-owned 500 employees would move to PipeChina as part
oil and gas companies to hand over control of of the management transfer.
10 liquefied natural gas (LNG) terminals to The country has a handful of privately
newly created China Oil & Gas Piping Network owned LNG import projects, while the three
(PipeChina). state majors’ control 90,000 km of the country’s
The move is the next step in the govern- 130,000 km of oil and gas pipelines. The gov-
ment’s plan to bring all of the country’s oil and ernment wants to bring control of the country’s
gas import and transportation infrastructure – transportation infrastructure under an inde-
currently dominated by China National Petro- pendent state company, thereby making it easier
leum Corp. (CNPC), Sinopec Group and China for third parties to gain access.
National Offshore Oil Corp. (CNOOC) – under Wood Mackenzie has estimated that Pipe-
the control of PipeChina, which was launched in China will eventually be worth $80-105bn once
December 2019. the transfers are complete.
The transfer will not see the Big Three lose Official newswire Xinhua reported in May
equity in the assets just yet, but will see PipeChina that the company had started building a new
assume control of seven CNOOC terminals, LNG terminal in Yantai City in eastern China’s
two belonging to CNPC and one from Sinopec, Shandong Province. The company expects to
Caixin quoted unnamed industry sources as say- bring the first phase of the 20mn tonne per year
ing. The three companies will continue to run 11 terminal, which is projected to reduce Shan-
terminals, two of which are still being built, once dong’s carbon dioxide emissions by 32mn tpy,
the handover has been completed. online in 2023.™

AUSTRAL ASIA

Queensland unveils new gas royalty model

POLICY AUSTRALIA’S Queensland has unveiled a new royalty models and concluded that the cur-
natural gas royalty model that will adopt a vol- rent royalty regime was not suitable for the
ume-based approach to calculating payments existing configuration of the Queensland gas
rather being index-based. industry.
The volume-based model will see royalties The Queensland Resources Council (QRC)
calculated on the volume of gas produced and has welcomed the shift to using “actual sales
will include a sliding rate scale and produc- rather than an index for calculating gas roy-
ers’ sales revenue. The new mechanism will be alties” and has hailed the fact that the model
locked in place for five years, though industry would offer lower rates for domestic production.
has already called for the Labor government to However, while it “noted” the five-year royalty
match the election pledge of a 10-year lock-in by freeze, it said more could be done to ensure sec-
the Liberal-National Party opposition. tor stability.
Treasurer and Minister for Infrastructure “The government has recognised that sta-
and Planning Cameron Dick said on June 8 ble royalties provide greater investment and
that the new volume-based model would sup- employment certainty for the resources industry.
port affordable supply for domestic customers, The LNP promised 12 months ago, if elected, it
appropriate returns for Queenslanders and fair- would stabilise royalties for 10 years,” QRC chief
ness for gas producers. executive Ian Macfarlane said.
“Queensland’s gas industry continues to do The Australian Petroleum Production and
the heavy lifting in supplying the gas for domes- Exploration Association’s (APPEA) head,
tic markets in Eastern states, while also meeting Andrew McConville, said clarity on the gov-
the needs of international customers,” he said. ernment’s policy position was important for the
“This review has been crucial in ensuring that upstream industry as it planned its next round
oil and gas companies are treated fairly, and that of investment.
Queenslanders receive their fair share of royal- “The decision helps to provide a level of cer-
ties from this important industry. The model is tainty to the industry which stands ready to con-
transparent, equitable, administratively simpler tribute strongly to Queensland’s recovery from
and locked in for five years.” the sharp economic downturn wrought by the
The model comes at the recommendation COVID-19 pandemic,” McConville said. “Now
of a working group that was independently is not the time for continued confusion or ongo-
chaired by former South Australian Premier ing debate about the economic framework for
Jay Weatherill. The group examined different investing in Queensland.”™

Week 23 12•June•2020 www. NEWSBASE .com P15