15 August 2012 10:17 [Source: ICIS news]
By Ricki Wang
SINGAPORE (ICIS--China’s inventory of imported liquefied natural gas (LNG) has been accumulating at ports since the second quarter of the year because of slowing domestic demand and increasing consumption of piped gas, market sources said on Wednesday.
This is the first time that the world’s second biggest energy consumer is in oversupply of LNG since ?xml:namespace>
China National Offshore Oil Corp (CNOOC), the country’s top LNG importer, is finding it hard to get its term cargoes loaded in
Demand for imported LNG volumes has been declining since late May, when
Shenzhen Dapeng LNG Marketing, an exclusive distributor of CNOOC’s truck-delivered LNG in Guangdong, south China, used to sell as much as 100 trucks of imported LNG each day during the peak summer season of June-September, the sources said.
Its daily LNG sales has dropped to just 30 to 40 trucks this year, the sources said, adding that sales to Shenzhen Gas alone has decreased by 3,000-4,000 tonnes/month.
Pipeline gas is also expected to squeeze the market share of CNOOC’s imported LNG on truck delivery in
LNG demand from power generation industry has been falling given this year’s economic slowdown, market sources said.
Demand from gas-fuelled power plants based in south
Meanwhile, some LNG consumers were unable to start up their new projects on schedule as
Falling demand for imported LNG could also be attributed to rising costs, especially of the volumes from
China’s import costs of Qatar cargoes averaged $1,002/tonne (€812/tonne) CFR (cost and freight) China or around yuan (CNY) 6,348/tonne in the second quarter in Guangdong, about 15% higher than the last done deal at CNY5,399/tonne in the local spot market, according to data from China’s General Administation of Customs.
In the same period in 2011, the average import cost of Qatari cargoes stood at $819/tonne CFR China or about CNY5,189/tonne and importers were able to sell volumes at a higher price of CNY5,611/tonne, officials data showed.
Moreover, there is no ceiling price set for Qatari cargoes, which are largely distributed in
“CNOOC was unable to lower its LNG offers on truck delivery in view of higher import costs, thus taking a disadvantageous position when competing with domestically produced volumes and pipeline gas,” a source at an LNG terminal in
For PetroChina, another major Chinese LNG importer, the cost of importing
The prices applied to its Rudong terminal in
($1 = €0.81 / $1 = CNY6.36)
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