GLNG: Shell, PipeChina sign terminal use agreement

Subsidiaries of Shell and China Oil & Gas Pipeline Network – known as PipeChina – have signed a memorandum of co-operation (MoC) and two terminal use agreements.
The terminal user agreements with Shell Energy (China) are for two LNG receiving facilities – Yuedong LNG and Beihai LNG – for this year. Under the MoC, the two parties will collaborate in the use of PipeChina's LNG receiving terminal slots in the long term, a PipeChina subsidiary said.
PipeChina is expected to contribute its domestic terminal operations expertise to the partnership, while Shell will provide access to its international gas portfolio, according to comments made by subsidiary PipeChina LTMC.
Last year, Shell struck a deal with QatarEnergy – which was then known as Qatar Petroleum – to supply 1mn tonnes per year (tpy) of LNG to China over a 10-year period.
Prior to the Shell deals, PipeChina awarded LNG receiving terminal slots for a period of 5-20 years to 14 applicants – all of them Chinese companies – in late 2021. The contracts will be effective from April.
The new deals make Shell the first international oil company (IOC) to sign a terminal user agreement with PipeChina, which is in the process of opening up its terminals to third-party access. The deals are also seen as illustrating the gradual liberalisation of China’s natural gas industry, and more LNG traders could now follow Shell in directly bidding for access to the country’s LNG terminals.
PipeChina was formed in 2019 to acquire pipelines and LNG terminals from the country’s state-owned energy giants. It currently operates seven LNG import terminals with a total receiving capacity of 27.6mn tpy. This accounts for nearly one-third of China's total LNG receiving capacity, according to the company. It is also constructing three additional import terminals – Shandong Longkou, Fujian Zhangzhou and Shenzhen Diefubei.
The company anticipates that bringing these terminals online will benefit more third-party users.