In this episode of the Commodities Focus podcast, S&P Global Petrochemicals Editor Abdulaziz Ehtaiba...

France's government is to closely monitor EDF's attempts to restart all its 56 French reactors this...

Nearly 60% of US LNG cargoes delivered in August landed in Europe as the Continent filled up storage...

PipeChina's spare LNG terminal capacity totals 13 mil mt for Feb-Dec 2022

US LNG cargo oversupply to Europe mounted in August, trade-flow data shows

With US-China tension rising, should American farmers be worried?

The spare LNG receiving capacity at seven LNG terminals affiliated with China Oil & Gas Piping Network Corp., also known as PipeChina, is around 13 million mt for the February-December 2022 period, according to data released by the state-owned oil and gas infrastructure company late Jan. 10.

Receive daily email alerts, subscriber notes & personalize your experience.

The volume accounts for 47.6% of the seven LNG terminals' total designed LNG receiving capacity of 27.6 million mt/year. The available capacity at PipeChina's six LNG receiving terminals was at 6.42 million mt in 2021.

Market participants said there has been a drop in interest from China's second and third tier gas companies for LNG terminal slots, due to high global gas prices and lower downstream demand. A lot of buyers expect LNG spot prices to remain above $20/MMBtu in 2022, with negative margins through most of the year, traders said.

The 6 million mt/year Tianjin LNG terminal in northern China and 2 million mt/year Yuedong LNG terminal in southern Guangdong province have just 13%-14% spare capacity left over the February-December 2022 period, the data showed.

Spare capacity at the 6 million mt/year Dalian terminal in northwestern Liaoning province is relatively high at 68% for the next 11 months, while the 3 million mt/year Hainan terminal in South China's Hainan island and the 600,000 mt/year Fangchenggang terminal in southwestern Guangxi province have more spare capacity than their total nameplate capacity over the period, the data showed.

It's common for LNG terminals to have a little more actual receiving capacity than their designed capacity due to debottlenecking.

PipeChina, prior to this, had awarded medium to long-term LNG receiving terminal slots for a period of five to 20 years to 14 applicants, with contracts effective April 1, 2022.

Privately-owned Guangdong Jovo Energy Group signed a medium to long-term LNG terminal user agreement with PipeChina Oct. 26, without disclosing further details.

PipeChina currently operates seven LNG receiving terminals -- Liaoning Dalian, Tianjin Nanjiang, Jieyang Yuedong, Shenzhen Diefu, Guangxi Beihai, Hainan Yangpu and Guangxi Fangchenggang.

The LNG terminals are located along China's coastal cities from the northeast to the south, with a combined capacity that accounted for a quarter of China's total LNG receiving capacity of around 105.8 million/year at the end of 2021.

"China's LNG imports, especially spot LNG imports are expected to reduce obviously in 2022, as importers would try to avoid big losses caused by import costs higher than domestic sales prices," according to a Beijing-based market participant.

The source said many smaller LNG companies were not expected to request a large number of PipeChina's terminal slots, when prices are likely to be elevated in 2022.

A second source said that a lot of slots will remain with PipeChina's Tianjin in 2022, with most Chinese firms looking to minimize spot procurement activity while maximizing long-term volumes with suppliers.

PipeChina LNG terminal spare receiving capacity over February-December 2022 (Unit: '000 mt)

Month Dalian Tianjin Yuedong Shenzhen Beihai Fangchenggang Hainan Total Feb 378 110 130 390 390 75 355.5 1,829 Mar 313 175 130 260 325 75 355.5 1,634 Apr 443 45 0 130 195 62.5 343 1,219 May 443 110 0 130 195 62.5 343 1,284 Jun 443 240 0 130 195 62.5 278 1,349 Jul 443 45 0 130 130 62.5 278 1,089 Aug 443 0 0 130 260 62.5 278 1,174 Sep 443 0 0 65 130 62.5 343 1,044 Oct 443 110 0 195 260 62.5 278 1,349 Nov 248 0 0 65 65 62.5 278 719 Dec 53 0 0 0 65 62.5 278 459 Total spare cap' 4,093 835 260 1,625 2,210 713 3,408 13,144 Designed cap' 6,000 6,000 2,000 4,000 6,000 600 3,000 27,600

To continue reading you must login or register with us.

It’s free and easy to do. Please use the button below and we will bring you back here when complete.