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Nation struggles to find enough LNG
(Shenzhen Daily)
Updated: 2005-12-05 08:53
China will have a hard time acquiring enough liquefied natural gas (LNG) to
feed its planned LNG terminals, according to a senior official with BP Plc.
åK½ï¿½China will have a very difficult time buying LNG at the prices itåK½ï¿½s willing
to pay,åK½ï¿½ Mark Pilcher, vice president of BPåK½ï¿½s Global LNG Division, said.
So far, Chinese companies have proposed building 16 LNG receiving terminals,
with as many as 10 of these originally planned to be operational by 2010.
However, so far, only two terminals, the most advanced in construction terms,
have secured long-term gas supplies, some of it from BP. These are GuangdongåK½ï¿½s
Dapeng LNG and Fujian projects, which will start operations in June 2006 and at
the end of 2007 using LNG from AustraliaåK½ï¿½s Northwest Shelf and IndonesiaåK½ï¿½s
Tangguh LNG, respectively.
Dapeng LNG is owned by China National Offshore Oil Corp. (CNOOC), BP and
various local investors, while the Fujian terminal is dependent on CNOOC Gas and
Power and Fujian Investment and Development Corp.
BP, which operates the Tangguh project in Indonesia, will be supplying about
127 billion cubic feet of LNG to the Fujian terminal.
Despite successes in lining up gas for those two projects, CNOOC has made
little headway in its efforts to buy LNG from Chevron Corp.åK½ï¿½s Gorgon project in
Australia, mainly due to disagreements on price.
åK½ï¿½Right now, there is a shortage of LNG in Asia, and thatåK½ï¿½s why prices are so
high. ItåK½ï¿½s also definitely true in the world,åK½ï¿½ Pilcher said. åK½ï¿½LNG prices in Asia
mostly follow the trend in oil prices. So if oil prices go up, LNG prices will
go up too.åK½ï¿½
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