RE: Had a thought...5 Oct 2021 09:53
Feeling lucky
Most of the China’s import terminals are owned by the dominant state-run oil and gas companies like China National Offshore Oil Corp (CNOOC) and PetroChina. The latest new facility, with a capacity of 800,000 tonnes a year, will take China’s total number of operating LNG terminals to 22. The capacity of most LNG tankers is about 150,000 cubic metres, so storage in LNG ships is really not an option.
CNOOC, parent of CNOOC Ltd, started China’s first terminal in 2006, and accounts for nearly 60 percent of its total receiving capacity. A handful of small private firms have in recent years stepped into the sector, including city gas developer ENN Energy, Jovo Energy and Guanghui Energy. The largest independent terminal, a 3 million tonne-per-year facility in east China, was built by ENN and started up in October.
According to China Petroleum and Petrochemical Engineering Institute and industry sources. A total of 9 million cubic meters of storage tanks are in operation at these terminals, with another 5 million cubic metres under construction.
In comparison UK has storage capacity of just 1 million cubic metres at 3 terminals - Hook, Isle of Grain and Milford Haven.
In the LNG market Europe is effectively the swing or balancing market for global gas. The amount of LNG that came to Europe is what wass left over after everyone else - including China - has taken what they need and less about what Europe needed in recent years.
All the other countries and regions in the LNG market are largely demand-driven. They often have few alternatives to LNG in the form of domestic production or pipeline imports, and limited gas storage facilities – all of this is in sharp contrast to Europe. China is the only major country with production, pipe imports and diverse LNG imports, but it lacks a liquid trading market like the NBP hub and demand which responds to price. Even over 10 million cubic meters already and another 5 under construction, China still has limited gas storage capacity. This means price LNG into Europe reach a new, long term plateau price. Effectively, we’ve enjoyed a period of exceptionally low gas prices, but the recent price rise is here to stay.
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