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.

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

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