CNPC to Begin $900 Million LNG Terminal, Pipelines in China
The municipal government of Dalian in Liaoning Province announced that the city’s construction for its liquefied natural gas (LNG) project has begun on the Dagushan Peninsula. The main investor, China National Petroleum Corporation (CNPC), will build the port, the receiving terminal and pipeline facilities for the project. The $900 million receiving terminal will cover an area of 200,000 square meters. A capacity of supplying 4.2 billion cubic meter gas will be formed after Phase I construction with the potential to double.
The LNG source for the receiving terminal, however, was not disclosed by the municipal government. It is believed that CNPC and Royal Dutch Shell Group concluded a binding framework agreement at the beginning of September 2007 about supplying the Chinese company 1 million tons of LNG per year over two decades. The final agreement is expected to be complete before December 2008. CNPC has signed a 15-year LNG supply contract with Australia’s largest oil and gas producer, Woodside Energy Limited, to purchase 2 million tons of LNG per year from 2013 to 2015.
China’s LNG industry is at the beginning stage of development, opening up opportunities for growth. A fast-developing economy and growing energy demand has been driving China to look for alternatives to crude oil, which is becoming increasingly expensive and has been blamed for environmental deterioration. Experts say China will import more than 120 million tons of LNG in 2010 and double that in 2020.
The country’s first LNG-receiving station was completed last year in Guangdong Province by China National Offshore Oil Company (CNOOC), China’s third largest oil company after CNPC and China Petroleum & Chemical Corporation (Sinopec). Those three companies are now competing with each other to take over strategic sites in China’s LNG program. According to their plans, the LNG-receiving capacities of CNPC, Sinopec and CNOOC will reach 12.5 million, 6 million-9 million and 12 million tons, respectively, in 2010.
Tags: CNOOC, CNPC, LNG, Petroleum, Shell, Sinopec