Others News
- Nation receives 1st-ever spot LNG cargo
Date: 11-May-2007 Sources: (Shenzhen Daily)
THE country has received its first-ever imported spot cargo of liquefied natural gas (LNG), according to a statement by Guangdong Dapeng LNG Co., which owns China's only operational LNG terminal.
The delivery of around 60,000 metric tons of LNG will likely pave the way for more spot cargo deals to fulfill strong demand for the fuel in the densely populated Pearl River Delta region, which includes the cities of Guangzhou and Shenzhen.
The government wants to increase the use of natural gas as part of efforts to reduce the country's dependence on dirty fuels such as crude oil and coal, which it blames for air pollution and a worsening environment.
The cargo was delivered to the Dapeng terminal in Shenzhen at the end of last month and was purchased ex-ship from Japan's Mitsubishi Corp. by Guangdong Dapeng LNG Co.
The cargo came from Qalhat LNG in Oman and was originally purchased by Spain's Union Fenosa Gas, which then sold it to Mitsubishi, according to the statement.
'The successful purchase of this cargo is a significant step in executing China's LNG strategy,'said Wu Zhenfang, chairman of Guangdong Dapeng LNG Co.
The spot cargo will supplement the 3.7 million metric tons of natural gas supplied each year under contract from Australia's North West Shelf. Guangdong Dapeng LNG Co. has a 25-year purchase and supply agreement with the venture.
According to the statement, the spot cargo will be used to supply customers via Guangdong Dapeng LNG Co.'s trunkline in the Pearl River Delta region.
'We will continue to seek new term LNG supply supplemented by spot supply to support strong demand for clean energy in the Pearl River Delta,'said Wu, who is also vice president of China National Offshore Oil Corp. (CNOOC). Guangdong Dapeng LNG Co. is a joint venture whose shareholders include units of CNOOC and BP Plc. with stakes of 33 percent and 30 percent, respectively.
Other partners in Guangdong Dapeng LNG Co. include Shenzhen Gas Corp. Ltd., Guangzhou Gas Co. and Hong Kong & China Gas Investment Ltd.
The flagship Dapeng complex, which cost more than US$3.6 billion, was commissioned in May last year and began commercial operations in September.
Last month, CNOOC signed a deal with Japan's Mitsui & Co. on spot trading of LNG to coincide with a visit to Tokyo by Premier Wen Jiabao.
This followed CNOOC's signing of framework agreements six months earlier to buy spot cargoes of LNG from Suez, Total SA and a unit of Royal Dutch Shell PLC.
CNOOC hopes spot cargoes will cover spikes in demand from end users for LNG and insulate itself against possible disruptions to supplies committed under long-term contracts.
In addition to Dapeng, CNOOC is planning a network of other LNG terminals along China's coastline.
Terminals at Fujian and Shanghai are under construction and have contracted LNG supplies from Indonesia and Malaysia respectively. CNOOC has plans for a terminal at Ningbo in the eastern province of Zhejiang.
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