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.

錕斤拷China will have a very difficult time buying LNG at the prices it錕斤拷s willing to pay,錕斤拷 Mark Pilcher, vice president of BP錕斤拷s 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 Guangdong錕斤拷s Dapeng LNG and Fujian projects, which will start operations in June 2006 and at the end of 2007 using LNG from Australia錕斤拷s Northwest Shelf and Indonesia錕斤拷s 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.錕斤拷s Gorgon project in Australia, mainly due to disagreements on price.

錕斤拷Right now, there is a shortage of LNG in Asia, and that錕斤拷s why prices are so high. It錕斤拷s also definitely true in the world,錕斤拷 Pilcher said. 錕斤拷LNG prices in Asia mostly follow the trend in oil prices. So if oil prices go up, LNG prices will go up too.錕斤拷