China’s CNOOC seeks overseas buyers for term LNG cargoes

06 August 2012 07:54  [Source: ICIS news]

SINGAPORE (ICIS)--China National Offshore Oil Corp (CNOOC) is seeking international buyers for a few term liquefied natural gas (LNG) cargoes scheduled for China because of weak domestic demand, traders said on Monday.

CNOOC usually obtains contract LNG from international suppliers and sells those cargoes in Chinese domestic markets.

However, due to sluggish demand in the domestic market, CNOOC’s LNG terminals in China have seen rising inventories and the company has had to consider selling some incoming cargoes in the international market, according to traders.

The company is likely to deliver two cargoes to overseas buyers, said a Singapore-based trader.

A source from CNOOC’s Shanghai Yangshan terminal said that the terminal’s inventories have exceeded normal levels because of the lacklustre demand as a result of mild temperatures this summer.

CNOOC’s Dapeng terminal in Guangdong province and Putian terminal in Fujian province have both run out of storage space because cargoes could not be sold, sources from the terminals said.

LNG sales are dampened by weak demand from local power plants and increasing competition from piped gas, they added.

“Whether CNOOC could find the buyers is still hard to tell, as demand in Asia is also soft and spot prices are not high,” a Guangdong-based importer said.

By: Ricki Wang
+65 6780 4359

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