China’s LNG supply tightens on unit shutdowns in Shaanxi

06 August 2013 08:38  [Source: ICIS news]

SINGAPORE (ICIS)--Supply of domestically produced liquefied natural gas (LNG) has declined in China as two major LNG plants with a combined liquefaction capacity of 3 million cubic metres (mcm)/day in Shaanxi province were shut on 3 August, market sources said on Tuesday.

Shaanxi Lvyuan Natural Gas and China Natural Gas Corp shut its 1mcm/day and 2mcm/day LNG plants at Yulin and Yan’an respectively because of power shortage on 3 August, company sources said.

The shutdowns resulted in a loss of about 2.4mcm/day in domestic LNG supply, according to data compiled by ICIS C1 Energy.

The two plants are expected to resume operation in mid-August and on 7 August respectively, the sources said.

Some downstream users had to purchase LNG from Ningxia Hanas Natural Gas, which sold 120 trucks/day of LNG (20-21 tonnes per truck) on 3-5 August, a LNG supplier based in Shaanxi said.

Ningxia Hanas Natural Gas normally sells 30 trucks/day of LNG.

However, domestic LNG ex-works prices were already at high levels amid expectations on higher feedstock gas prices following China’s implementation to reform the gas pricing mechanism nationwide on 10 July, the supplier said.

Therefore, producers are likely to maintain their prices unchanged despite falling supply, the supplier added.

By: Jane Han

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