Gas Processing & LNG is Produced by Gulf Publishing Holdings LLC



China's LNG prices drop as industrial users curbed, supply crunch eases

BEIJING (Reuters) — LNG prices in northern China have dropped more than 40% from record highs reached less than two weeks ago as a supply crunch has eased and curbs have been enacted on industrial users of the fuel.

Ex-plant LNG prices were quoted at 5,700 yuan/t ($877/t) in the Inner Mongolia region, compared to 9,750 yuan on Dec. 24, industry publication www.yeslng.com reported on Thursday. Prices in Shaanxi province fell 46% during the same period to 5,520 yuan.

“Some industrial users were cut off gas supply or couldn’t afford it,” said Li Ruipeng, a manager at trucked-LNG dealer Tangshan Huapu Gas Co based in the city of Tangshan in the northern Chinese province of Hebei.

“Supplies have increased as more gas has been diverted from the south to north,” said Li.

Chinese demand for natural gas has surged this winter after the government required residential and industrial users to switch to the fuel for heating to reduce the emissions produced by coal heating. Under the plan, industrial users could have their gas shut off in the event of supply shortages.

Last month’s record high prices forced some industrial and even some residential users to switch away from natural gas to liquefied petroleum gas or coal, said Diao Zhouwei, an analyst at IHS Markit.

Some steel mills in Tangshan, China’s biggest steel producing city, were forced to stop operations as the fuel became too costly, said another LNG trucking dealer, who asked to remain unidentified.

“Some may only resume after the heating season is over,” said the dealer.

On Dec. 18, amid the surge in gas prices, China’s economic planner the National Development and Reform Commission (NDRC) ordered state-owned energy companies to cut gas supply to industry by about 15 MMcm/d.

However, the industrial curtailments have not caused imported LNG prices to drop as much the ex-plant prices of domestically produced fuel.

Ex-terminal quotes for PetroChina’s Caofeidian receiving terminal were down 22% over the past ten days to 5,130 yuan/t, yeslng.com reported.

Ex-terminal prices at Sinopec Corp’s Qingdao terminal were little changed during the period and were at 7,400 yuan/t on Thursday, the website reported.

Supply to northern China has been bolstered by diversions of gas from the south. Last month, the NDRC said 14 MMcm/d of gas was being moved from the south to the north.

Reporting by Chen Aizhu; Editing by Christian Schmollinger


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
According to GIIGNL’s 2018 Annual Report, global LNG trade expanded by 3.5 Bft3d in 2018, to 38.2 Bft3d—a record 10% increase.
Power, LNG projects drive pipeline construction in Africa
-Shem Oirere
Increasing public investment in gas-fired power plants in Africa, the continuing recovery in global oil prices and persistent insecurity in key producer markets, such as Nigeria, are likely to impact gas transmission pipeline projects on the continent, even as more international companies express interest in the region’s stranded gas resources.


Maximize Profitability with Advanced Analytics at Natural Gas Processing Plants

View On-Demand

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

View On-Demand

 

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.