Trans­port fu­els LNG growth

China pre­dicted to use 45 bil­lion cu­bic me­ters of gas by 2030

China Daily (Canada) - - BUSINESS - By DU JUAN du­juan@chi­nadaily.com.cn

As China strives to con­vert to cleaner en­ergy, its liq­ue­fied nat­u­ral gas pro­duc­tion ca­pac­ity will soar in 2014, with higher prof­its sup­port­ing more projects. Fifty-five projects in the sec­tor will be com­pleted this year, which will bring the coun­try’s to­tal daily LNG pro­duc­tion ca­pac­ity be­yond 60 mil­lion cu­bic me­ters, ac­cord­ing to es­ti­mates from ICIS C1 En­ergy, a Shang­hai- based en­ergy con­sul­tancy.

LNG pro­duc­tion ca­pac­ity grew 51.2 per­cent to 38.35 mil­lion cu m a day last year, ac­cord­ing to the con­sul­tancy.

Fig­ures from the CNPC Eco­nom­ics and Tech­nol­ogy Re­search In­sti­tute, which uses dif­fer­ent cal­cu­la­tion meth­ods, show that China has 66 LNG projects in op­er­a­tion with a to­tal ca­pac­ity of 33.77 mil­lion cu m a day.

The fig­ure will grow to more than 70 mil­lion cu m a day this year if all the projects un­der con­struc­tion are com­pleted, said the in­sti­tute.

“Com­pe­ti­tion in the do­mes­tic LNG mar­ket is be­com­ing more in­tense,” said the in­sti­tute. “Par­tic­i­pants in the mar­ket are diver­si­fied, with pri­vate, State-owned and for­eign com­pa­nies.”

Ac­cord­ing to the in­sti­tute, pri­vate com­pa­nies hold a 62.3 per­cent mar­ket share.

Ris­ing prof­its are the ma­jor in­cen­tive for the ex­pan­sion of LNG projects.

Ac­cord­ing to ICIS C1, the av­er­age LNG price last year ex­ceeded 4,000 yuan ($ 659) a met­ric ton. The price peaked at 4,750 yuan a ton in Novem­ber, or 1,021 yuan higher than a year ear­lier, ac­cord­ing to the con­sul­tancy.

“Most LNG sup­pli­ers had bet­ter prof­its last year thanks to grow­ing de­mand based on LNG con­sump­tion in the trans­porta­tion sec­tor,” said the con­sul­tancy.

LNG con­sump­tion is surg­ing around the world be­cause of in­creased re­stric­tions on emis­sions.

En­ergy con­sult­ing firm Wood Macken­zie es­ti­mated in late Jan­uary that global nat­u­ral gas de­mand in the trans­port sec­tor will grow from nearly 40 bil­lion cu m in 2012 to more than 160 bil­lion cu m in 2030.

“The most strik­ing thing is the growth of LNG de­mand as­so­ci­ated with the trans­port sec­tor, in­creas­ing from less than 5 bil­lion cu m in 2012 to more than 80 bil­lion cu m in 2030 and in­creas­ing from less than 1 per­cent to some 10 per­cent of global LNG de­mand,” ac­cord­ing to Wood Macken­zie.

“China will re­main

the sin­gle largest mar­ket for gas in trans­port, with con­sump­tion of 45 bil­lion cu­bic me­ters by 2030,” said Noel Tom­nay, head of global gas re­search for Wood Macken­zie.

“De­mand in China is be­ing pro­pelled by a com­bi­na­tion of win­ning fac­tors,” Tom­nay said. That in­clude strong ve­hi­cle mar­ket growth and fi­nan­cial sup­port from re­gional gov­ern­ments.

Th­ese trends are driv­ing up China’s LNG im­ports and the num­ber of LNG re­ceiv­ing ter­mi­nals in the coun­try.

As of the end of 2013, China had 10 ter­mi­nals in op­er­a­tion with an an­nual ca­pac­ity of 32.3 mil­lion met­ric tons, ac­cord­ing to ICIS C1. It fore­cast that the na­tion’s an­nual ca­pac­ity will grow to 37.3 mil­lion tons in 2014, with two new ter­mi­nals go­ing into op­er­a­tion.

In 2013, China’s LNG im­ports rose 22.4 per­cent to 25 bil­lion cu m, ac­cord­ing to the CNPC in­sti­tute.

In the down­stream sec­tor, China is build­ing more LNG fu­el­ing sta­tions be­cause the num­ber of LNG-pow­ered ve­hi­cles is in­creas­ing.

Ac­cord­ing to ICIS C1, China will build more than 400 LNG sta­tions this year and the coun­try will have about 2,500 sta­tions by yearend.

From 2009 to 2011, sup­ply short­ages and tech­nol­ogy con­straints lim­ited the growth of LNG sta­tions in China.

As the prob­lems were re­solved, the num­ber of LNG sta­tions more than dou­bled in 2012 and grew 130 per­cent in 2013.

LIU DEBIN / FOR CHINA DAILY

Work­ers check pres­sure valves at a nat­u­ral gas fa­cil­ity in Dalian, Liaon­ing prov­ince. In 2013, China’s LNG im­ports rose 22.4 per­cent to 25 bil­lion cu­bic me­ters, ac­cord­ing to the CNPC Eco­nom­ics and Tech­nol­ogy Re­search In­sti­tute.

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