Gas Processing is Produced by Gulf Publishing Company

Your source for technology information for the gas processing industry

China buys rare Norway LNG cargo as spot deals rise ahead of winter

BEIJING (Reuters) — China has bought a rare cargo of LNG from Norway, Reuters shipping data shows, the latest sign that the world's second-largest economy has rushed to increase spot purchases to ensure fuel supplies ahead of the coming winter.

Trade flow data on Thomson Reuters Eikon shows LNG tanker Grace Cosmos, with a cargo of 143,625 cm loaded in Melkoya, Norway, heading to China for delivery on Oct. 30.

It is the first LNG cargo China has bought from Norway since December last year and one of only six in the past 3-1/2 years. Melkoya serves the Snohvit LNG terminal operated by Statoil.

While only a small portion of the billions of cubic meters China imports each year, the deal represents a growing need as Beijing intensifies its war on the choking smog that shrouds the north of the country.

This winter, China will use natural gas to heat millions of homes across the north for the first time, as the government tries to wean the nation off its favorite fuel, coal.

That effort will add an estimated 10 Bcm to China's gas demand, about 5% of its consumption last year and equivalent to Vietnam's annual use.

Concerns about sufficient supplies for such an ambitious project have grown, said a gas researcher from an energy think tank run by China National Petroleum Co (CNPC), the country's top oil and gas group and a major importer.

"We should see more buying on the spot market with more consumption coming from north China," the researcher said.

China bought 22.1 MMt, equivalent to 30 Bcm, of foreign LNG in the first eight months of the year, up 44% from a year ago. Almost half of that came from Australia followed by Qatar.

Data showing September natural gas imports will be released on Friday morning.

An increase in spot buying may give Asian LNG spot prices further upward momentum. They are currently at $8.50 per MMBtu, their highest since mid-January.

A source at China National Offshore Oil Corp, China's biggest LNG importer, said the company has bought more spot cargoes this year because they are cheaper than domestic natural gas production.

Some of CNOOC's term cargoes were resold this year but this was not essential because demand has been solid, the source said.

Other Chinese oil majors, including state-owned refiner Sinopec, resold term LNG supplies or renegotiated deals due to strong competition from cheaper spot supplies.

Reporting by Josephine Mason, Tom Daly and Meng Meng; Editing by Tom Hogue

Copyright © 2018. All market data is provided by Barchart Solutions. Futures: at least a 10 minute delay. Information is provided 'as is' and solely for informational purposes, not for trading purposes or advice. To see all exchange delays and terms of use, please see disclaimer.

                                  CMEGroup                                     Icelogo


Business Trends
-Julian Thomas
Indonesia, home to 260 MM people on 14,000 islands across a vast archipelago, is estimated to become the seventh-largest economy in the world by 2030, with such growth expected to boost the nation’s energy consumption by 80% from present levels.<sup>1</sup>
Editorial Comment
-Adrienne Blume
At October’s HPI Forecast Breakfast for our sister publication, <i>Hydrocarbon Processing</i>, I shared <i>Gas Processing</i>’s forecast on change in the LNG industry.
Executive Viewpoint
-Christina Andersen
In one of the toughest markets in the history of gas compression, we are challenged to deliver more with less.

The New LNG Imperative

Register Now

The shale gas boom established the US as the world’s leading natural gas producer and is responsible for billions of dollars of investments in the US gas processing industry. Since 2012, the US has witnessed unprecedented growth in new gas processing capacity and infrastructure. This rise is due to greater production of domestic shale gas, which is providing cheap, available feedstock to fuel the domestic gas processing, LNG and petrochemical industries. New gas processing projects include the construction of billions of cubic feet per day of new cryogenic and gas processing capacity, NGL fractionators, multi-billion-dollar pipeline infrastructure projects, and the development of millions of tons per year of new LNG export terminal construction. Attend this webcast to hear from Lee Nichols, Editor/Associate Publisher, Hydrocarbon Processing, Scott Allgood, Director-Data Services, Energy Web Atlas and Peregrine Bush, Senior Cartographic Editor, Petroleum Economist as they discuss the future of LNG and the application of Energy Web Atlas, a web-based GIS platform which allows users to track real-time information for every LNG project.

November 29, 2017 10am CST

View on Demand


Please read our Term and Conditions, Cookies Policy, and Privacy Policy before using the site. All material subject to strictly enforced copyright laws.
© 2015 Gulf Publishing Company.