China's CNOOC halts piped gas supply to Zhongshan after leakage

21 December 2011 09:29  [Source: ICIS news]

SINGAPORE (ICIS)--China National Offshore Oil Corp (CNOOC) has suspended its piped gas supply to Zhongshan city following a sub-sea pipeline gas leakage near its Zhuhai terminal on 19 December, a local government official said on Wednesday.

CNOOC shut its production at Panyu 30-1 and Huizhou 21-1 gas rigs on the afternoon of 19 December, when the leakage was found, and has been conducting a depressurisation process at the Zhuhai terminal, which processes gas that is piped from the two platforms.

CNOOC is the major gas supplier to Zhongshan city and the two platforms are its major production fields, a source from the Zhongshan Development & Reform Commission said.

Towngas Zhongshan and Zhongshan Public Utilities, the city’s major gas operators, rely on CNOOC for gas supply, a source from Towngas said.

“We [Towngas Zhongshan and ZPU] are now receiving only 250,000 cubic metres (cbm)/day of gas, which is a 50% decline from 500,000cbm/day before the accident,” the source added.

Towngas Zhongshan is planning to source liquefied petroleum gas (LPG) to compensate the temporary supply shortage.

In addition, the operator will consider buying LNG from CNOOC’s Dapeng terminal in Shenzhen, the source said.

“The supply for household consumption will remain our top priority,” the source said.

“Some local power plants that are fuelled by natural gas have stopped operating or turned to using LNG,” the source added

CNOOC Gas & Power has shut its 600,000cbm/day LNG plant at Zhuhai as a result of halted feedstock supply following the incident, a company source said.

“We have to buy LNG from suppliers, such as Shenzhen Dapeng, to meet downstream demand because [the shutdown] was unplanned and inventory levels are low,” the company source added.

LPG supply in the south China market is also affected as the gas is a major by-product of CNOOC’s gas fields in Guangdong, a market source said.

The supply glitch is likely to boost LPG demand in Zhuhai, Zhongshan and Jiangmen as some local industrial users may turn to using LPG as substitutes for natural gas, the market source added.

Some market sources said it may take one to two months for CNOOC to resume its production and supply.

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By: Jane Han



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