17 December 2012 09:15 [Source: ICIS news]
SINGAPORE (ICIS)--China is expected to add about 1,000 trucks for the transportation of liquefied natural gas (LNG) in 2013, bringing the country’s total number of LNG tank trucks over 4,000 units, market sources said on Monday.
The freight rates for LNG carriers went up in China in September and November when the transport capacity was tight, which also dampened LNG sales from some domestic producers in the northern regions, the sources explained.
Therefore, some LNG producers with projects that are newly-finished or under construction, including oil and gas giants and large gas companies, began to purchase their own trucks, the sources said.
Xinjiang-based Guanghui Energy, for example, has bought 200 trucks for LNG transportation, and they are expected to be in service from late 2012 or early 2013, a company source said.
Shaanxi Lvyuan Natural Gas plans to launch 200-300 trucks in late 2013 for LNG delivery for the company’s three liquefaction plants that are currently under construction, a company source said.
Meanwhile, Sinopec has purchased 500 trucks as the oil and gas giant has been progressing rapidly in the LNG industry and has brought on stream many LNG-refuelling stations since the beginning of 2012, according to a company source.
A large gas company is also planning to start its own logistics business and will buy 100 trucks as it is exploring LNG downstream markets, said a company source who refused to be identified.
However, only a few logistics companies specialising in LNG transportation have plans to purchase trucks, according to industry sources.
Most logistics companies are cautious in buying new trucks in view of low freight rates since January 2012 and high risks in operation, a south China-based LNG logistics trader said.
Moreover, China’s LNG logistics companies are expected to focus on transportation over short distances as more domestic LNG producers tend to distribute their outputs in markets that are in close proximity, the logistics trader added.
“Therefore, a sudden increase in truck numbers will impede the development of the LNG logistics industry, as it still takes time to fully utilise the current 3,000 units in China,” the trader said.
“However, it’s unknown how much of the new trucks will be eventually put into service,” he added.
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