Page 10 - AsianOil Week 12
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parent company’s upstream ambitions in the western region of Xinjiang.
Sinopec set a domestic drilling depth record in February 2019 with the 8,588-metre Ying-1 well at the Shunbei oil and gas field in Xinjiang’s Tarim Basin. This came just two weeks after the company drilled the 8,520- metre 5-5H well on the same field. Sinopec’s record has since been broken, however, with China National Petroleum Corp. (CNPC) announcing in January 20 that it had hit oil
and gas in the 8,882-metre Luntan One well in Tarim.
China’s drillers have been targeting deeper reserves in the west of the country since out- put from mature eastern fields has begun to fall off. However, increasing spending on more expensive wells amid depressed domes- tic demand, surging international supply and multi-year oil price lows is an unexpected move, given that Sinopec’s average breakeven price is estimated at $40-60 per barrel.
Yantai LNG obtains approval to build import terminal
PROJECTS & COMPANIES
CHINA’S Yantai LNG Group has been given government approval to build an LNG terminal in Shandong Province. Citing a Yantai’s execu- tive director, Eric Wang, Reuters reported that the company was planning to issue a tender for the work in April.
The announcement comes as China cau- tiously starts to loosen the lockdown it intro- duced in order to contain the coronavirus (COVID-19) outbreak, which is now hit- ting other parts of the world hard. Chinese demand for LNG is unlikely to pick up rapidly given high inventories and the slow pace of recovery. However, in the longer term, China is still anticipated to become the world’s lead- ing importer of LNG.
Chinese gas demand is estimated to have increased to 70-80% of normal levels this week. It was previously expected to fully recover by April but there is now concern that new infec- tions from other parts of the world could trickle back into China, resulting in a new outbreak in the country.
Yantai is planning further ahead than this, with the first phase of the LNG terminal set to start up by 2023.
According to Wang, approval to build the terminal was granted by the National Develop- ment and Reform Commission (NDRC) in late January. The commission has not publicly com- mented on the matter.
The terminal will be built in two phases, each with a capacity of 5mn tonnes per year (tpy). The first phase of the project is estimated to cost $1.1bn.
The project will include a receiving berth with a capacity of 266,000 cubic metres, five 200,000-cubic metres LNG storage tanks, one 50,000-cubic-metre transhipment berth and regasification facilities, Wang said.
The terminal will be linked to cities across Shandong and beyond by a 530-km pipeline. According to Wang, approval to construct the pipeline – at a cost of $1.2bn – is anticipated within the next month. He added that Yantai had signed a memorandum of understanding (MoU) covering gas supply with 28 downstream firms, including refineries and city gas companies.
The Yantai project is owned by Poly-GCL Pan-Asia International Energy (Shandong), a joint venture between Poly-GCL Petroleum Holding Group, Pan-Asia International Energy Distribution Center and Yantai Port Group.
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w w w . N E W S B A S E . c o m Week 12 26•March•2020
