Clean fuel drive to continue LNG's stellar run

"This year, PipeChina will further consolidate midstream gas assets and provide third-party access and more new players are expected to enter the market. This could further boost LNG demand," Cao said.

Some new contracts signed by nonnational oil companies also began this year, including Foran Energy and ENN's deal with BP for 600,000 million tons of LNG supply each, with deliveries starting this year.

Liu Ping with CNOOC (Hainan) Fudao Chemical Ltd, who is also a deputy to the 13th National People's Congress, said it was necessary for the country to step up infrastructure facility construction to ensure sufficient energy supply.

Compared with other energy storage facilities, the LNG terminals enjoy rapid construction speed and flexible and convenient storage. While the country is already rapidly building up its LNG terminal construction, it still lags far behind the global average, he said.

After the Dapeng LNG terminal was constructed in 2006 by CNOOC, the country had 22 LNG terminals nationwide by the end of 2020, including six operated by PipeChina, five by CNOOC, five operated by nonnational oil companies including local SOEs and private companies, four operated by China National Petroleum Corp and two by China Petroleum & Chemical Corp. Total capacity reached 86 million tons per year, according to BloombergNEF.

However, compared with countries including Japan and South Korea, China has a long way to go in stepping up the utilization rate of coastal land resources and operational costs, and the government should prioritize extending the capacity of existing LNG terminals to further raise the gas storage facilities' utilization rate, Liu said.

CNOOC, as a pioneer of China's LNG sector that built the nation's first LNG terminal in 2006, vowed to further diversify its overseas LNG sources to further ensure supplies.

It signed a memorandum of understanding with Malaysia's state oil firm Petronas on March 15 for further collaboration across the supply chain, including refining, oilfield and engineering services, specialty chemicals, lubricants and renewable energy, based on their current relationship in LNG and upstream projects.

Being the country's largest offshore oil and gas producer, CNOOC will also intensify collaboration with Petronas, the world's fourth-biggest LNG exporter, in the establishment of a global bunkering supply network and expansion of the use of natural gas as a cleaner marine fuel through LNG bunkering solutions.

With an annual receiving capacity of 29.6 million tons at its Shanghai LNG terminal, Zhuhai LNG terminal, Dapeng LNG terminal, Fujian LNG terminal as well as Zhejiang LNG terminal, the company is currently the country's biggest LNG importer and the world's third largest. It aims to set up more LNG terminals in Fujian and Zhejiang provinces to increase its receiving capacity.