PetroChina hikes gas prices to LNG plants in two provinces

30 September 2013 03:56  [Source: ICIS news]

SINGAPORE (ICIS)--PetroChina has raised the prices of natural gas from its Changqing Oilfield to liquefaction plants in Shaanxi and Inner Mongolia, following negotiations with buyers on 27 September, liquefied natural gas (LNG) suppliers from the two regions said on Monday.

The prices were increased by more than 31%.

Its gas prices are now at yuan (CNY) 1.955 /cubic metre (cbm) ($0.319/cbm) for supply volumes equivalent to a buyer’s actual consumption in 2012, and at CNY2.48/cbm for additional supply over the buyer’s 2012 volume, representing increases of 31.2% and 66.4% respectively, they said.

The price adjustments are effective from 1 September.

Additional pipeline charges of CNY0.235-0.27/cbm are applicable for PetroChina’s gas supply via long-distant pipelines to plants located in Inner Mongolia, the sources said.

About seven LNG plants in Shaanxi and Inner Mongolia can pay the lower-priced “existing supply”,  ICIS C1 Energy’s research showed.

The combined liquefaction capacity of these plants is at 5.25m cbm/day, making up 49.99% of the total capacity in the two regions.

The gas price hikes are likely to significantly push up LNG prices,  market sources said.

Gas supply from  Changqing Oilfield  will also be cut by around 20% to all liquefaction plants during the winter consumption peak, as a notable supply shortfall is expected, the LNG suppliers said.

Gas supply to some plants may even be suspended if necessary, added the suppliers.

PetroChina’s Changqing Oilfield supplies feedstock natural gas to more than 90% of the LNG plants in Shaanxi and Inner Mongolia.

($1 = CNY6.12)

By: Jane Han

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