Page 9 - GLNG Week 11

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Yantai LNG given go-ahead for import terminal
INVESTMENT
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 hitting 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. How- ever, in the longer term, China is still anticipated to become the world’s leading 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.™
Novatek, Gazprombank, Sinopec apply to set up gas trading JV
PROJECTS & COMPANIES
The planned partnership will be involved in the import and export and the purchase and sale of gas, including both piped gas and LNG in China.
RUSSIA’S Novatek and Gazprombank and Chi- na’s Sinopec applied to the European Commis- sion to form a joint venture in China, the EU regulator said on March 17.
The planned partnership will be involved in the import and export and the purchase and sale of gas, including both piped gas and LNG in China, the EC said. It will also invest in gas-re- lated projects in the country.
The company will be known as Sinova Nat- ural Gas. Novatek, Gazprombank and Sinopec signed a heads of agreement (HoA) on establish- ing the joint venture in June 2019.
Novatek ships LNG to China from its 17mn tonne per year (tpy) Yamal LNG plant in the Arc- tic, where it is partnered with state-owned China National Petroleum Corp. (CNPC) and Beijing’s Silk Road Fund. Its next major LNG export pro- ject, Arctic LNG-2, is due on stream in 2023 and is also expected to deliver considerable volumes to the Chinese market.
Novatek is looking to strengthen its LNG business by controlling the entire supply chain, right down to sales to end-users in China and other key Asia-Pacific markets. As part of its
strategy, last year it also struck preliminary deals with Indian LNG developers H-Energy and Petronet LNG on the joint marketing of the super-cooled gas in India. It also entered into a HoA deal with Japanese gas supplier Saibu Gas on marketing LNG and developing gas-fired power generation and bunkering operations.
Novatek’s goal is to cut costs and also gain a larger foothold in Asia’s growing gas markets.
China’s largest oil and gas producer, Pet- roChina, predicted in January that the country’s gas demand would expand by 8.6% year on year in 2020 to 330bn cubic metres, after increasing by 9.9% in 2019 to 308 bcm. While this projec- tion was made before the coronavirus (COVID- 19) shut down much of the country’s economic activity, and forced the country’s gas importers to either trigger force majeure clauses in their contracts or defer shipments, China is begin- ning to ramp up its industrial and commercial activity.
While demand may miss PetroChina’s initial projections, the likelihood is that the govern- ment’s efforts to tackle air pollution will still lead to material consumption gains this year.™
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