China National Offshore Oil Corp. (CNOOC) has rented a convoy of 100 trucks to transport LNG from its main receiving terminals in southern China to alleviate gas shortages in the north. Northern China has only one LNG terminal and shortages are worsening.
Although trucking LNG to industrial customers has become more common this year, it is unusual for a company to resort to this on such a scale or across such large distances.
CNOOC did not say how much it had spent on renting the trucks but Reuters calculated that trucking LNG 2,400 km from its Zhuhai receiving terminal in southern China to Baoding – a major city in northern Hebei province – would take around two days and cost 50,400 yuan (US$76,257) per truck.
That would equate to nearly a third of the value of a 20-tonne cargo of LNG, based on offer prices of 9,000 yuan (US$1,368) per tonne on December 15. 17 trucks per day will make the journey.
CNOOC has only one LNG receiving terminal in southern China, in Tianjin, and this is already operating at full capacity. “We hope to provide more LNG resources to north China with truck delivery,” CNOOC said in its statement.
This follows an announcement the previous week that it had also rented two tankers to provide floating storage for LNG imports off China’s coast.
With northern China’s gas shortages intensifying, China’s National Development and Reform Commission (NDRC) ordered CNOOC and industry peers China National Petroleum Corp. (CNPC) and Sinopec on December 18 to reduce natural gas supplies to manufacturers of chemicals, methanol and fertiliser by around 15 mcm per day.
NDRC spokeswoman Meng Wei also said that Beijing had co-ordinated with the three major energy companies to augment supplies by raising gas output, boosting imports and accelerating infrastructure development.
China has been transporting 14 mcm of gas per day from southern to northern China, with plans to increase that to around 19 million tonnes per day, she added. It also intends to buy 3.5 bcm of LNG in overseas markets in addition to an earlier plan to import 24.5 bcm over the winter.