Honghua’s big deal

Rig maker to build gi­ant LNG fa­cil­ity in Gulf of Mex­ico

China Daily (USA) - - FRONT PAGE - By ZHENG XIN

Chi­nese on­shore drilling rig maker Honghua Group said it had signed its first off­shore deal, to build a gi­ant LNG fa­cil­ity in the Gulf of Mex­ico for US com­pany Argo LNG Part­ners LLC, in a con­tract­worth about $1.8 bil­lion.

The deal was inked by Honghua’s unit Shang­hai Honghua Off­shore Oil and Gas Equip­ment Co and Argo, and the first phase of con­struc­tion is sched­uled to take two to three years.

The liq­ue­fied nat­u­ral gas fa­cil­ity will com­prise four pro­duc­tion plat­forms, four stor­age plat­forms, an ac­com­mo­da­tion plat­form, one cen­tral pro­cess­ing plat­form and a pier for LNG ships. Its an­nual pro­cess­ing ca­pac­ity and stor­age ca­pa­bil­ity will be up to 3.6 mil­lion met­ric tons and 240,000 cu­bicme­ters, re­spec­tively.

Honghua Chair­man Zhang Mi said the in­te­gra­tion of a port and LNG fa­cil­i­ties us­ing Chi­nese man­u­fac­tur­ing pro­cesses could help lower costs.

He said the first phase of the LNG plant would be de­liv­ered to clients us­ing a mod­u­lar man­u­fac­tur­ing process and em­ploy­ing the world’s big­gest off­shore crane with a lift­ing ca­pac­ity of 22,000 tons.

“The co­op­er­a­tion not only presents a Sino-US break­through in de­vel­op­ment and uti­liza­tion of clean en­ergy, but a sig­nif­i­cant and in­no­va­tive co­op­er­a­tion be­tween the two par­ties in man­u­fac­tur­ing high-end equip­ment,” Zhang said.

LNG is a clean and non­toxic liq­uid which is formed when nat­u­ral gas is frozen to mi­nus 126 C for eas­ier stor­age and trans­porta­tion.

Ac­cord­ing to Platts, the lead­ing in­de­pen­dent provider of in­for­ma­tion and bench­mark prices for the com­modi­ties and en­ergy mar­kets, de­mand for LNG in China has been ris­ing and the US as a LNG pro­ducer would be tar­get­ing the Chi­nese mar­ket in the fu­ture.

To­tal Chi­nese LNG im­ports in 2016 so far are up by about 18 per­cent year-on-year and US LNG is rel­a­tively cheap com­pared with other sources of LNG, said se­nior Platts cor­re­spon­dent Stu­art El­liot.

China im­ports LNG from sev­eral coun­tries. The more al­ter­na­tives avail­able, the cheaper LNG could be pro­cured, Elliott added.

Zhang said the US would be­come the big­gest LNG ex­porter in the world, while nat­u­ral gas con­sump­tion in China was in­creas­ing rapidly due to en­force­ment of en­vi­ron­men­tal pro­tec­tion rules.

Honghua said that last year nat­u­ral gas con­sump­tion in China was less than 200 bil­lion cu m, count­ing for less than 6 per­cent in terms of to­tal amount of pri­mary en­ergy con­sump­tion, far lower than the global av­er­age level of 24 per­cent.

Newspapers in English

Newspapers from China

© PressReader. All rights reserved.