Chinese firms eye LNG units start-up before gas price hike

11 April 2013 12:04  [Source: ICIS news]

SINGAPORE (ICIS)--Several Chinese companies have accelerated the construction of gas liquefaction plants and they plan to complete the work within this year, before the hike in gas prices, company sources said on Thursday.

Most of these plants were originally scheduled to come on stream in 2014, they said.

Shenzhen-based Dawei Energy, for example, has accelerated the construction of its 3 million cubic metre (mcm)/day liquefied natural gas (LNG) plant at Heze in Shandong province, and it aims to finish the construction by October 2013, a company source said.

The advancements are made in a bid to avoid rises on gas costs, as it is widely predicted that China will increase natural gas prices in 2013, the sources explained.

“We are hoping that the central government could hold up the gas price hikes till we finish the construction of our many new LNG plants,” one northwest China-based LNG supplier said.

“In this case, we will be able to save a lot in gas cost because we can enjoy the existing prices, ” added the supplier.

Under the most likely scheme of gas price reform, higher prices would be implemented only for additional volumes. This means that new prices only apply to new orders after the hike, a major LNG supplier based in east China said.

The final scheme and timeline for gas price hikes are yet to be decided and there is also no clear definition of existing and additional volumes, a major gas supplier said.

Even if these companies manage to start up their plants earlier than schedule, however, they may face difficulties in getting gas supply, the supplier said.

By: Jane Han

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