16:00 - 16:25
Tuesday, 17 September 2019
S1.2 Second Wave of Terminal Investment in China: Developments & Implications
Primary Category: Strategic Themes / Midstream or Full Value Chain / Contracts, Trading & Pricing
Imported LNG has been playing a growingly important role in China's gas supply. For the first eleven months of 2018, China imported 14.38 mmtp more LNG compared to the previous year, representing ~60% of the country's total incremental gas supply.
Import volume is actually constrained by terminal capacity. The average utilization rate of China's 20 operational terminals during Jan-Nov 2018 was 83%, while terminals at the Lower-Yangtze River region were witnessing 114% annualized utilization!
As a China gas-focused consulting firm, SIA Energy forecasts that China's LNG receiving capacity will double by 2025 reaching 136 mmtpa. While NOCs will focus on brownfield expansion, the non-NOC, Tier-2 players who traditionally position as city gas operators, gas power generators and provincial gas grid operators will build greenfield projects. Nearly 70% of China’s proposed capacity come from these Tier-2 players. Who are they? Are they physically and professionally ready to sign long-term contracts? How will they restructure the relationship with NOC suppliers? And what are the implications to global sellers, to contracting and pricing? These are the questions this presentation aims to answer.