Regional LNG: CNOOC to build another China LNG terminal
Monday, February 9 2004 - 06:26 AM WIB
They said the second terminal, to be built near Shanghai, will help ease a natural gas shortage in eastern China, while the LNG will also serve as a substitute fuel to natural gas supplied to the region via pipeline by PetroChina Co.
"We shouldn't have only one source for gas supply. We need multiple sources of supply to ensure energy security," said one CNOOC official.
The timing and size of the project hasn't been finalized, but construction won't begin soon, he said, because China will make sure the country's first two LNG terminals in southern and eastern China are successful.
In the south, CNOOC, BP PLC (BP) and local partners have already started building China's first LNG terminal, agreeing to import 3 million metric tons of LNG annually from Western Australia over 25 years, beginning in 2006.
CNOOC has started preparations to build a second LNG terminal, in eastern China's Fujian province, with the LNG to be imported from Indonesia.
CNOOC will favor Australian LNG to supply the Shanghai terminal, the official said, without elaborating.
Last October, CNOOC announced plans to buy a 12.5% stake in the Gorgon gas project in western Australia. The company had previously announced its intention to take a 25% stake in the North West Shelf project, which exports 7.3 million tons a year of LNG, mainly to Japan.
Another CNOOC official said his company will seek local partners to jointly build the Shanghai LNG terminal, but the company is yet to decide how much of a stake it will hold in the project.
Eastern China's gas demand will grow to 10 billion cubic meters a year by 2005 from a small consumption base currently, and further to 20.5 billion cubic meters a year by 2010.
About 50% of that demand will come from power generators, while gas used as a feedstock for the chemical industry will fall from 24% in 2005 to 13% by 2010.(*)