Gas Processing is Produced by Gulf Publishing Company

Your source for technology information for the gas processing industry


China buys rare Norway LNG cargo as spot deals rise ahead of winter

BEIJING (Reuters) — China has bought a rare cargo of LNG from Norway, Reuters shipping data shows, the latest sign that the world's second-largest economy has rushed to increase spot purchases to ensure fuel supplies ahead of the coming winter.

Trade flow data on Thomson Reuters Eikon shows LNG tanker Grace Cosmos, with a cargo of 143,625 cm loaded in Melkoya, Norway, heading to China for delivery on Oct. 30.

It is the first LNG cargo China has bought from Norway since December last year and one of only six in the past 3-1/2 years. Melkoya serves the Snohvit LNG terminal operated by Statoil.

While only a small portion of the billions of cubic meters China imports each year, the deal represents a growing need as Beijing intensifies its war on the choking smog that shrouds the north of the country.

This winter, China will use natural gas to heat millions of homes across the north for the first time, as the government tries to wean the nation off its favorite fuel, coal.

That effort will add an estimated 10 Bcm to China's gas demand, about 5% of its consumption last year and equivalent to Vietnam's annual use.

Concerns about sufficient supplies for such an ambitious project have grown, said a gas researcher from an energy think tank run by China National Petroleum Co (CNPC), the country's top oil and gas group and a major importer.

"We should see more buying on the spot market with more consumption coming from north China," the researcher said.

China bought 22.1 MMt, equivalent to 30 Bcm, of foreign LNG in the first eight months of the year, up 44% from a year ago. Almost half of that came from Australia followed by Qatar.

Data showing September natural gas imports will be released on Friday morning.

An increase in spot buying may give Asian LNG spot prices further upward momentum. They are currently at $8.50 per MMBtu, their highest since mid-January.

A source at China National Offshore Oil Corp, China's biggest LNG importer, said the company has bought more spot cargoes this year because they are cheaper than domestic natural gas production.

Some of CNOOC's term cargoes were resold this year but this was not essential because demand has been solid, the source said.

Other Chinese oil majors, including state-owned refiner Sinopec, resold term LNG supplies or renegotiated deals due to strong competition from cheaper spot supplies.

Reporting by Josephine Mason, Tom Daly and Meng Meng; Editing by Tom Hogue


Copyright © 2018. All market data is provided by Barchart Solutions. Futures: at least a 10 minute delay. Information is provided 'as is' and solely for informational purposes, not for trading purposes or advice. To see all exchange delays and terms of use, please see disclaimer.

                                  CMEGroup                                     Icelogo

FEATURED COLUMNS

Editorial Comment
-Adrienne Blume
At CERAWeek by IHS Markit, held in Houston in March, IEA Director Fatih Birol said that the world would soon see a major second wave of shale gas production from the US in response to higher energy prices and growing demand from India and China.
Regional Focus
-Shem Oirere
Mozambique and Tanzania hold an estimated 180 Tft3 and 57 Tft3 of proven natural gas reserves, respectively.


Maximize Profitability with Advanced Analytics at Natural Gas Processing Plants

Register Now

Incorporating economic data into process modeling is key to optimizing operations and maximizing profits at gas processing plants. However, maintaining optimal operations are often challenging due to changing market dynamics, contract structures and increasing process flexibility. Today, gas processors are leveraging Predictive Control and First Principles models to accurately determine and control the optimal operating targets in real time based on the most current plant conditions and profitability, optimizing recovery of natural gas liquids. Learn how real-time analytics, combined with decision support tools, empower companies to:
•Improve processing margins by up to 5%
•Maximize NGL production through improved availability and optimized process conditions
•Improve compositional control to operate closer to product specifications

May 22, 2018 10am CDT

Register Now

 

Please read our Term and Conditions, Cookies Policy, and Privacy Policy before using the site. All material subject to strictly enforced copyright laws.
© 2018 Gulf Publishing Company.