China oil production report. Daqing deposit. Minerals of China China deposit
Vladimir Khomutko
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Development of oil production in China
China has the world's largest economy. The country's own hydrocarbon reserves are clearly insufficient. Starting in 1993, the People's Republic of China began to turn into one of the largest exporters of "black gold" in the world, which significantly influenced the energy market of the entire Asia-Pacific region. Despite some recent slowdown in Chinese economic growth, the country's demand for hydrocarbons will only grow in the short term.
Until the 90s of the last century, information about the oil reserves of this country was a state secret. In addition, one should distinguish between potential reserves of raw materials and explored ones.
To this day, experts are forced to be content with the data provided by the Chinese side. According to these data, the volume of reliable Chinese oil reserves on land is 5 billion 300 million tons, and on the shelf of the Pacific Ocean - 4 billion tons.
Despite the shortage of oil produced in China for their own needs, some of it was even exported for some time (mainly to Japan, and a little to the DPRK and Vietnam). However, since 1980, exports have been steadily declining. For example, if in 1986 28 million 400 thousand tons of crude oil were exported from the PRC, then in 1999 this figure was only 8 million 300 thousand tons, and since 200 export deliveries have stopped altogether.
The total length of the Chinese main oil pipelines exceeds 10 thousand kilometers.
One of these highways is the pipeline connecting the Tsaidam field (Golmud city) and Tibet (Lhasa city). Its length is 1080 kilometers.
The largest group of oil fields in this country is concentrated in the North-East of this country, in the basin of the Liaohe and Songhuajiang rivers (Songliao oil basin). This group of deposits is collectively called Daqing.
This oil-bearing province combines the oil fields of Changwo, Daqing, Daqing-E, Xinzhou, Shengping, Gaoxi, Songpantong, Changcunlin and Putaohua-Abobaota. The total volume of reserves in this region was estimated from 800 million to one billion tons of "black gold", but intensive development has significantly reduced the reserves of these fields.
Not far from the Daqing group of deposits, there is another Chinese deposit - Liaohe, from which up to 10 million tons of "black gold" were produced annually in the mid-80s of the last century. Also nearby is a field called Fuyui, with an annual volume of extracted raw materials up to 2 million tons per year.
The Daqing oil fields are connected to the ports of Qingdao and Dalian, as well as the capital of the People's Republic of China, Beijing, the Anshan region and the Dagang field (the largest in North China) by a pipeline system. At the end of the last century, up to three and a half million tons of crude oil were obtained from the Dagan field per year.
The most famous fields in Eastern China are the fields, which are united by the common name Shengli.
This group includes oil fields such as Gudong, Jingqiu, Chengdong, Yihezhuang, Yangsanmu, Shengto, Hekou Gudao, Yunandongxin, Hajia, Chun Haozhen, and Shandian. At the turn of the twentieth and twenty-first centuries, up to 33 million tons of raw materials were mined here annually. Shengli is connected by oil trunk pipelines with the cities of Zhengzhou and Xinan. Also in the eastern Chinese province of Hebei there is an oil-bearing region called Jingzhong, with an annual production volume of up to five million tons.
If we talk about the southwestern provinces of China, then there are also oil deposits, concentrated in the Sichuan province (north of the city of Chongqing). These deposits are called Nanchong, Yinshan and Panlanchen.
The volume of production is about 2 million 200 thousand per year. It was in this Chinese province, 6 centuries before our era, that the Chinese used bamboo from shallow workings.
In Guangdong Province (South China), there is oil in a field called Sanshui. The volume of production is about two million tons of oil annually.
Recently, the PRC has pinned great hopes on its northwestern "black gold" deposits, concentrated in the west of the Xinjiang Uygur region of China. This autonomous region includes Yumen, Dzungaria, Qinghai, Karamai, Turfan Hami and Tarim.
According to Chinese experts, about 30 percent of China's oil reserves are located here. If in 1997 these fields produced 16 million 400 thousand tons of raw materials per year, then in 2001 this figure rose to 23 million tons. The largest fields in this province are the fields of the Tarim depression.
The volume of explored reserves here is 600 million tons, and potential - almost 19 billion. In the north of this depression, there are concentrated industries called Tamarik, Kan, Ichkelik, Dunchetan, Duntsulitage, Yakela, Bostan, Tugalmin, Akekum, Tergen, Qunke, Santamu and Lunnan. In the south of the Tarim Basin, a group of industries under the general name of Tachzhong is concentrated. They are connected with the northern part (the Lunnan fishery) by a pipeline with a length of 315 kilometers.
In the west of Tarim (border with Kyrgyzstan and Tajikistan), oil-bearing regions (Bashetopu and Karato) are also open. More than 14 million tons of crude oil were obtained from the fields of the Tarim Basin in 2010 alone. In Dzungaria, between Altai and Tien Shan, there is the old Karamai oil field, discovered back in 1897.
The potential reserves of this oil-bearing region are estimated at 1.5 billion tons. The Karamay - Shanshan and Karamay - Urumqi pipelines were laid from here. The annual production volume is about five million tons. In the Tsaidam Depression, there is a group of fields called Lenghu, producing up to 3.5 million tons of "black gold" per year. There is an oil pipeline connecting Lenghu and Lanzhou.
Currently, 90 percent of China's oil is produced onshore. Offshore oil production began in 1969 on the shelves of the Bohai Bay, the East South China and the Yellow Seas. There are proven oil deposits on the shelf of Hainan Island.
Potential oil reserves in the South China Sea, on the shelf of which 12 countries of this region claim, are estimated by experts from 10 to 16 billion tons. All states of this region a year on this shelf extract from 150 to 200 million tons of "black gold". Of this amount, China accounts for just over 16 million.
If we talk about the Chinese oil refining industry, then the total capacity of its enterprises is more than 5 million barrels of raw materials per day.
Chinese refineries that produce petroleum products are concentrated in large Chinese cities and close to the most important fields. Gradually, the share of imported raw materials for this sector of the Chinese economy is increasing, since Chinese oil grades are characterized by a high sulfur content, which makes it more profitable to process light Middle Eastern grades of this mineral. The largest Chinese refinery is a plant located in Hainan Province (Danzhou city). The first stage of this enterprise cost 2 billion 200 million US dollars.
Major Chinese oil companies
Mining in China is under tight government control and vertically integrated. Currently, after the 1998 restructuring, the largest in China are three oil companies:
- China National Petroleum Corporation (CNPC). This company controls 70 percent of the state's explored oil resources, concentrated in the northern, northeastern and western provinces. In 1999, a new subsidiary was formed called PetroChina Company Ltd, which received most of the domestic assets of the national corporation from CNPC. CNPC itself retained the entire overseas business as well as the management of the pipeline system.
- China National Marine Petroleum Corporation (CNOOC). With subsidiaries CNODC and CONHE. As the name implies, it is engaged in offshore oil production.
- China Sinopec Petrochemical Corporation. It is in charge of the Chinese oil refining industry.
In addition to these three giants, there are other companies that have been created for highly specialized purposes:
- CPECC is engaged in the construction of infrastructure for the oil economic sector, and also takes part in the construction of oil refineries.
- China Petroleum Bureau (KNB) - there are several such enterprises, their main task is the construction of pipelines.
- Production in the south of China is carried out by a company called China National Star Petroleum Co, formed in 1997.
- Shanghai Petrochemical is engaged in oil refining in the north-east of China.
- Zhenhai Referining & Chem is a refinery in southeast China.
A fairly well developed legal framework made it possible for foreign corporations to start working in this country quite successfully. Back in 1998, 130 contracts were signed between China and 67 foreign companies representing 18 countries of the world, allowing them to explore and operate oil fields located on the shelf of the South China Sea. The total amount of attracted investments amounted to almost 3 billion US dollars.
According to statistics, today the People's Republic of China ranks third in the world in terms of mineral reserves (about 12% of the world's total). Geologists have confirmed that in the depths of the PRC there are deposits of ten types of energy resources, forty-six types of ferrous and non-ferrous metals, more than ninety types of non-metallic ores, eight types of precious and rare metals.
Of particular importance for the country are the huge reserves of coal (mainly coal), for which it ranks first in the world: the volume of its proven reserves is estimated by geologists at one trillion tons. In addition, China is now the world's largest gold producer (about 430 tons annually).
Features of the relief of China
The relief of China is very diverse, and geographers usually distinguish three main regions on its territory:
- The Tibetan Plateau;
- Belt of mountains and high plains;
- Low accumulative plains.
The Tibetan Plateau, located in the southwest of the country, has an average elevation of 4,877 meters above sea level and has a total area of \u200b\u200b2.5 million square kilometers. In the Tsaidam depression located on it (altitude - from 2,700 to 3,000 meters above sea level), there are large deposits of iron ores, coal and oil.
The belt of mountains and high plains is located to the north, northeast and northwest of the Tibetan Plateau. A large oil field has been explored in its western part, and deposits of iron ores and coal are located in the southern part. Low accumulative plains are located in the eastern part of China and account for about 10% of the total area of \u200b\u200bits territory. They are composed of sediments of large and small rivers.
Types of minerals in China
The People's Republic of China possesses almost all types of minerals. In this country, large deposits of coal have been explored and are actively being developed (the volume of its annual production is more than 3500 million tons), very significant volumes of oil.
In addition, China has very significant deposits of shale, and therefore it is planned that in the near future the country will become one of the leading producers of shale gas (the Chinese intend to increase its production to 100 billion cubic meters annually by 2020).
Resources and deposits of China
The main coal deposits in China are located in the Shaanxi provinces (30% of the total production), which in the Middle Kingdom is often called the "house of coal".
Today, there are about 300 oil fields in this country, and most of them are located in Shandong province (Shengli field), Heilongjiang (Daqing field), in Xinjiang Uygur Autonomous Region (Hadesun field), as well as in some other regions of the country ( including on its continental shelf).
The largest iron ore deposit (Anshan) is located in Liaoning province. As for the non-ferrous metal ores, the largest copper ore deposit (Densing) is located in Jiangxi province. The richest deposits of tungsten ores were also found in the same region.
Chinese companies are investing $ 40 billion in the development of shale oil in the United States. Bloomberg reported this, citing statements from China's largest energy companies.Oil and gas giant CNPC (China National Petroleum Corp) at a meeting of the People's Assembly of China announced that it is considering investing in the development of shale oil in the United States. In February, the company's closest competitor, China Petrochemical Corporation, promised to invest $ 1.02 billion in oil fields in Oklahoma.
It is worth noting that when investing in American deposits, Chinese companies enjoy preferential government loans. Chinese investments in the commodity industry are also taking place in other countries in the Americas.
Last year, China's Cnooc acquired the Canadian oil and gas company Nexen for $ 15.1 billion. The company was involved in the production of both shale oil and shale gas.
The investment expansion of Chinese companies into the US shale gas market began in 2010. Then Cnooc paid $ 1 billion for a 33% stake in the Eagle Ford field of the American raw materials company Cheasapeake Energy. China is also actively developing oil shale in its own country.
China lacks its own resources. The Chinese authorities predict that the share of imported oil by 2015 will amount to 61%. Today the figure is 56%.
Earlier it became known that there was a shift in the oil market: China bypassed the United States and became the largest net importer of oil in the world. In December, US net oil imports fell to 5.98 million barrels. per day - this is the lowest value since February 1992, the publication indicates. In the same month, China's net oil imports rose to 6.12 million barrels. per day.
The United States has been the world's largest oil importer since the 1970s. last century. This is what largely shaped the US policy towards the oil-producing countries - Saudi Arabia, Iraq, Venezuela and others.
Now, the reliability of oil supplies, and hence stability in the Middle East, will also concern China. In fact, the country is already starting to act: state-owned companies in the PRC have invested billions of dollars in Sudan, Angola and Iraq.
In addition, today it became known that China National Petroleum Corp is negotiating with Eni SpA to purchase a stake in a gas project in Mozambique, which is estimated at $ 4 billion.
The deal will allow China to gain a foothold in one of the largest gas fields in the world. At the same time, the deal could become the largest acquisition of CNPC abroad. Previously, Chinese companies bought oil and gas fields in various African countries, from Nigeria to Uganda, to meet the country's energy demand.
1. Production and consumption of natural gas in the PRC
The statistics on natural gas reserves in the PRC are not published. Based on the data of statistical services of Western companies, it can be argued that the explored reserves do not exceed 1% of the world and at the end of 1999 were equal to 1.6 trillion cubic meters, recoverable reserves - 1.0 trillion cubic meters. It is typical that the ratio of reserves and gas production (R / P ratio) is equal to 62.1, i.e. with stable production, they should be enough for 62 years.
The explored gas reserves on the shelf of the seas surrounding China are estimated at 350 billion cubic meters, of which the largest (100 billion cubic meters) are concentrated in the Yacheng field in the South China Sea.
The first large gas field in China was the Sichuan group of fields (discovered in 1955) with proven reserves at that time of 500 billion cubic meters: Weiyuan, Zilyujing, Yankaoshi, Nashi, Zhishui, Shilongxia, Shiyukou, Nantong, Nanchi. Gas fields in the western part of the PRC (XUAR), where 34% of the PRC's gas reserves are concentrated, including the Tarim, Dzungaria and Ordos fields, have all great prospects. According to Chinese data, the explored reserves of the Tarim basin are 400-500 billion cubic meters, gas strata are located at a depth of 3.5-3.9 km. The main deposits of the northern part of Tarim are Kucha, Kala-2, Yahe, Jilake, Inmayli, Yudun-Fentake, Kumger, Kosamptok. In Dzungaria and Turfan-Hami in 1997, 2 billion cubic meters of gas were produced. According to experts, 3 billion cubic meters of gas will be produced at all fields in the XUAR in 2000, while in 2002 it is planned to increase production here to 20 billion cubic meters.
Table 1
Gas reserves in selected fields of the PRC, trillion m 3
Natural gas production in China is growing, but less dynamically than oil production.
table 2
Natural gas production in China by years (bcm)
| 1970 | 1,7 | 1992 | 15,1 |
| 1975 | 8,9 | 1993 | 16,2 |
| 1980 | 13,7 | 1994 | 16,6 |
| 1981 | 14,0 | 1995 | 17,4 |
| 1985 | 12,9 | 1996 | 19,9-22,0 |
| 1986 | 13,8 | 1997 | 22,2 |
| 1987 | 13,7 | 1998 | 20,4-22,0*/ |
| 1989 | 14,0 | 2000 | 29.0 (forecast) |
| 1990 | 14,2-15,2 | 2005 | 30.0-45.0 (forecast) |
| 1991 | 14,9 | 2010 | 65.0-70.0 (forecast) |
* / Of these, CNPC produces 14.8 billion cubic meters, Sinopec - 2.4 billion cubic meters.
Sources:.
As for liquefied natural gas (LNG), its production by 2005 according to the plan will reach 3 million tons, and by 2010 - 8-10 million tons.
China's gas industry is in its infancy. Currently, natural gas in the balance of energy consumption in the country is about 2%. Natural gas consumption in China in 1998 amounted to only 19.3 billion cubic meters, in Hong Kong - 2.6 billion cubic meters. There is only 17 m 3 of gas per capita per year, which is several times less than in developed countries. It is precisely the low degree of gasification that should be attributed to the fact that China is still fully satisfying its needs for natural gas. However, it is assumed that the demand for it will grow annually by 9-10% and by 2010 will grow from today's 22 billion cubic meters per year to at least 60 billion cubic meters. At this time, China will already claim the role of a large and promising gas importer. Some analysts predict an even faster growth in gas consumption in the PRC (see Table 3).
Table 3
Deficit of gas consumption in the PRC by years (bcm, forecast)
| 2000 | 2005 | 2010 | |
| Demand | 44-55 | 70-90 | 110-150 |
| Deficit | 16-26 | 25-45 | 40-80 |
A source: .
However, gasification in China is still of a point nature - gas is used mainly in the field area and in large cities. The general gas pipeline network has not been created; there are only gas pipelines connecting the largest fields and industrial areas: Xinyang-Xian, Xining-Lanzhou, Lanchou-Xian, Karamai-Cainan (294 km), Shaanxi-Beijing province.
By 2010, it is planned to build 7,000 km of new gas pipelines in China. The Ordos-Beijing (860 km) and Yacheng-Hong Kong branches have already begun. In general, the gas pipeline network, the creation of which is planned to be completed by 2020, will be capable of passing 150 billion m 3 of natural gas annually. In 2000, the PRC government approved a plan to build the largest gas pipeline in the country, the so-called Western Gas Corridor with a length of 4,200 km, with completion in 2007. Its throughput capacity is planned at 12-20 billion cubic meters per year, the estimated cost of the project is $ 12-13 billion (all figures are not final). The western gas corridor begins at the Lunnan field, will pass from Tarim and Dzungaria through 8 provinces of China: Gansu, Ningxia Hui Autonomous Region, Shaanxi, Shanxi, Henan, Anhui and Jiangsu to Shanghai, which will allow gasification of this region of the country. The project is overseen by the China Oil and Gas Consolidated Company and will be attended by BP Amoco and Royal Dutch Shell.
2. Companies
Natural gas production in China is vertically integrated and tightly regulated by the state. The main place in the country's gas industry is held by the China National Petroleum Co. (CNPC), with a division of PetroChina Ltd, which accounts for 68% of gas production. The rest is shared by the China National Offshore Oil Corp. (CNOOC) and the China Petrochemical Corp. (Sinopec).
There are also a number of foreign companies operating in China. In fact, the main
the strategic partner of the Chinese state represented by CNPC is BP Amoco, which owns 2.2% of the shares of CNPC's subsidiary PetroChina. In the spring of 2000, BP Amoco took over from the Russian Gazprom a project to build China's gas infrastructure, including transport pipelines, processing plants and terminals for liquefied gas in the most industrialized regions of the PRC - Shanghai and the Yangtze Delta. BP Amoco will also supply local and imported gas there. Apparently, this company will continue to play a key role in the development of the energy sector in China as a whole.
Enron (USA) signed a letter of intent with Petrochina to build a 765 km gas pipeline from Sichuan to Wuhan and Shanghai. The work began in 2000, the end - in 2007. Enron Oil & Gas China Ltd (EOGC) is formed, where Petrochina holds 55% of the shares. The company also intends to develop a new Guanzhong gas field in Sichuan.
On the Chinese shelf, mainly in the South China Sea, about 4 billion cubic meters of gas are produced per year. American companies Santa Fe, Chevron, Atlantic Richfield Co. are taking part in offshore production. Foreign companies Caltex China, Chevron, Shantou Ocean Enterprises are implementing a number of projects for the construction of LNG storage terminals in Guangdong and Hainan provinces. In addition, the Italian ENI signed a production sharing agreement with PetroChina on a number of fields in the center of the country and is conducting exploration work on the shelf of the South China Sea and in the Tarim Basin.
China is showing interest in the $ 34 billion Tehran-Tokyo international pipeline project recently unveiled. In the Asia-Pacific region, several projects have already been put forward to create a network of gas pipelines within the framework of the so-called "energy community" by international organizations: the Pacific Economic Council (TPP), ASEAN, APEC. We are talking about connecting Japan, South Korea and other APR countries with a network of gas pipelines in order to link them into a single energy hub, since the energy resources of the countries are limited. A single gas pipeline connecting all ASEAN countries could reach 8,000 km in length, at a cost of $ 20-30 billion. Such projects do not seem so utopian, since all East Asian countries of the Asia-Pacific region by 2010 will become net importers of oil and gas. The main problem in this case is the selection of the most reliable supplier countries.
3. Russian projects
The prospects for Russian-Chinese cooperation in the field of gas exports are traditionally assessed as bright. For example, SEI SB RAS in 2000 carried out a systematic assessment of the prospects for the development of the Russian gas industry, which foresees, at stage 1 (2000-2010), among other things, the construction of gas pipelines from the Irkutsk region to China and Korea. It was assumed that already in 2010 the volume of Russian gas exports to Northeast Asia will amount to 30 billion cubic meters.
However, in our opinion, there is no particular reason for such optimism. The estimate is based on China becoming a major importer of oil and gas. If until now oil came mainly from the region of the Near and Middle East, then with the growing dependence on energy imports, China cannot afford a one-sided dependence on political risks in the highly turbulent Persian Gulf region. China is undoubtedly concerned about the diversification of its main sources of oil and gas. There are three potential sources of diversification: Russia, the countries of the Caspian region and the shelf of the South China Sea. If we follow the logic of the Novosibirsk people, then China will cover at least half of the future deficit with supplies from the Russian Federation.
However, so far, the PRC's real activity is demonstrated in a completely different region: in the actively developing oil and gas market of the South China Sea states (the authors plan to consider the prospects for the development of the oil and gas market of this region's states and its significance for the Chinese economy in a separate article).
The potential of gas reserves of the South China Sea shelf is comparable to the North Sea region in Europe, and a significant part of the potential oil reserves here may become proven in the coming years. When assessing Kazakhstani and Russian prospects in the Chinese gas market, one should also take into account that supplies from Malaysia, Indonesia and other neighboring states are currently more attractive for China from a strategic point of view. It is here that the processes of the emergence of a single market are taking place, this is where the main Chinese expansion will head, and it is necessary to understand this during the preparation of Russian proposals.
So far, the most famous and most developed of the possible Russian-Chinese gas projects is the gas pipeline from the Kovykta gas condensate field in the Irkutsk region. In 1996, during the visit of President Boris Yeltsin to the PRC, a joint interest in this project was announced, and during a visit in 1997, a memorandum on the preparation of a feasibility study was signed. Then it was assumed that Japan and South Korea would join the project in the future. The project provided for the supply of at least 20 billion cubic meters of natural gas annually for 30 years, of which 10 billion was supposed to be consumed in China, the rest was intended for the Republic of Korea and Japan, where the price of liquefied gas will be, according to forecasts, $ 225-240 per 1,000 cubic meters which is relatively expensive. The feasibility study was supposed to cost $ 50 million, and its final version was supposed to be ready in 2001. The total cost of the gas pipeline project is estimated at $ 3 billion. Gas supplies could begin as early as 2006, if the final route is determined in 2001.
However, from the very beginning, the project faced a number of difficulties. First of all, the reserves of natural gas of the field approved and accepted on the state balance sheet amount to 870 billion cubic meters of gas and 60 million tons of condensate (1999). Prospective reserves are 1.29 trillion cubic meters of gas (geologists admit 2-2.5 trillion cubic meters in the field) and 100 million tons of condensate. The depth of the productive reserves is 2800-3000 m. According to the feasibility study, Russia must confirm the presence of at least 1.4-1.5 trillion cubic meters (according to Western data, the presence of 1 trillion cubic meters of gas reserves has already been confirmed).
The subsoil user of the Kovykta field is RUSIA Petroleum (RP); it was established in 1992 and received a license for prospecting, exploration and production of gas in the Kovykta field until 2018. The founders were Varioganneftegaz and the Angarsk Petrochemical Plant. In 1994, both founders became part of the Sidanko company, which signed a letter of intent with the China National Petroleum Corporation (CNPC) on the gas pipeline. In 1997, BP Amoco, invited to review the project, making sure of its prospects, acquired a 10% stake in Sidanko and a 45% stake in RP - the gas pipeline project from Kovykta perfectly fit into the Chinese strategy of BP Amoco itself.
After numerous changes in the composition of the RP shareholders and litigation for the subsidiaries of Sidanko, today BP Amoco owns 30.84%, and its main competitor - Tyumen Oil Company (TNK) - 6% of the RP and the license for geological exploration of Kandinsky and Yuzhno-Ust- Kutskoye blocks of the field. TNK hopes to increase its stake in RP to 10%. This introduces additional confusion in determining the prospects for the project, especially since without reserves of two gas-bearing blocks, the license for which belonged to TNK until recently, it was impossible to “collect” 1.4-1.5 trillion cubic meters of gas required for guaranteed supplies.
However, in March 2001, TNK merged its licenses with the main ones, as a result of which it will be able to increase its stake in the Republic of Poland to 19.6%. There are also certain disagreements between BP Amoco and the state shareholders of the Republic of Poland, in particular, JSC Irkutskenergo (12.88%) and the property fund of the Irkutsk region (13.97%).
At the moment, it is BP Amoco who conducts and pays for additional exploration of the project and prepares the feasibility study. However, no real documents have been signed with the Chinese side yet. There is only a general agreement on the development of a feasibility study for the construction of a pipeline, signed back in 1998, but this does not mean that the PRC recognized the Kovykta project as preferable for gas supplies. At the same time, several other projects are being considered, including Gazprom's proposals for gas supplies from Western Siberia, Kazakh and Turkmen options, as well as the possibility of receiving gas from Sakhalin Island.
On the way to the implementation of the Kovykta project, there are several obstacles at once: the already mentioned unfinished additional exploration; the composition of the main shareholders has not been finally determined (for example, Rosneft announced its intention to sell 8.5% of its stake, as a result of which TNK may become stronger); too low gas price on the PRC market, which the Chinese side named as preliminary; indefinite tax regime (the draft law on transferring the Kovykta field to PSA terms has so far been adopted by the State Duma only in the first reading); disagreements over the gas transportation route.
According to the project of the Russian side, the route of the gas pipeline with a length of 3.4 thousand km starts from the Kovykta field to Irkutsk, then along the Ulan-Ude-Ulan Bator railway through Mongolia, then to Beijing and to the port of Rizhao on the Yellow Sea. From here, along the seabed, the gas pipeline should stretch to the South Korean port of Sampo. Liquefied gas from Sampo will be delivered by tankers to Japan and possibly to Taiwan. As in the case of Siberian oil, there is a gas pipeline project from Ulan-Ude to Harbin, bypassing Mongolia. It should be noted that there is no agreement on the route even among the Russian shareholders of the RP.
Despite all these difficulties, apparently, the matter will still get off the ground in the near future, because, as reported by the Expert magazine, during V. Putin's trip to Seoul in early March 2001, an agreement was reached on the construction of a gas pipeline linking the Korean peninsula with the Kovykta field. Construction is expected to be carried out by the largest
gas companies in South Korea and China.
In addition to RUSIA Petroleum and BP Amoco, Gazprom also announced its intention to supply gas to the Chinese market. According to some reports, negotiations were underway on Gazprom's participation in the Kovykta project, but the gas giant was not satisfied with the proposed share of 20-30%. A similar in volume, but more expensive, Gazprom project of the Yamal-China gas pipeline is currently being negotiated, which, under favorable circumstances, could go into operation in 2005 and produce 25-35 billion cubic meters of gas annually for 30 years (approximate project cost $ 16 billion). At present, a general agreement has been signed on possible gas supplies via the main gas pipeline with a diameter of 1420 and 1200 mm from the Yamal Novo-Urengoyskoye and Vostochno-Urengoyskoye fields to the PRC. For this, Gazprom has initiated the creation of a consortium. The weak point of the Yamal-China gas pipeline is its length (5,000 km). The route has not yet been determined, but if the gas pipeline passes through the Altai Republic to the XUAR, it could be connected to the above
Western Gas Corridor.
In addition, Gazprom and CNPC are discussing a gas pipeline project from the base Chayandinskoye field (Yakutsk) to Blagoveshchensk, then to Harbin and the port of Dalian. The work on the feasibility study of the project is being carried out by Sakhaneftegaz (Yakutia).
Nevertheless, it is not entirely clear where Gazprom intends to take the declared volumes of supplies (from 30 to 150 billion cubic meters annually) in case of favorable development of the negotiations. So, on March 15, 2001, he published very disappointing preliminary results for 2000, which indicated a decline in production by 5% compared to 1999. This trend has existed for the last few years, and there are objective reasons for this - fields that entered a period of production decline now account for 78% of all natural gas fields in Russia. Taking into account that the high inertia of the gas industry requires an advance of investment by 5-7 years from the time of commissioning new fields, and 1993-1995 were not the best for investments, the decline will continue for at least several years. However, at the same time, the drop in production fell entirely on the domestic market: gas exports in 2000 were the largest in history and amounted to 129 billion cubic meters. To a certain extent, Gazprom is using the decline in production to defy its obligations on the domestic market, where the government is holding back gas prices. Consequently, at any moment one can expect a new round of struggle between the government and Gazprom in order to force the latter to fulfill its obligations on domestic supplies, and this is unlikely to give the PRC enthusiasm in negotiations with the gas monopoly.
4. Errors and misunderstandings
In the past few years, the press and even scientific articles have been dominated by
optimistic and often utopian assessments of the prospects for oil and gas exports from Russia to China:
On the basis of Russian oil and gas fields, it was planned to create its own kind of Russian-Chinese integration center, free from fluctuations in prices on the world market;
Suggestions were made about the possibility of creating an East Asian energy market based on Russian gas as the first link in a single Eurasian gas market, the core of which could be a system of future transcontinental Russian and Chinese gas pipelines;
Of course, one should not even discuss the no less groundless anti-Chinese statements that “the growing economy of the PRC will suck oil and gas from Russia like a vacuum cleaner,” that “energy pipelines are a potential lever of pressure on Beijing,” as well as all sorts of reasoning like whether in the future China will be able to join the blockade of Russia by blocking the pipeline in the APR.
At the same time, real examples of cooperation between Russia and China in the field of oil and gas are very modest. These, in addition to the above-mentioned projects and the Yukos-planned oil pipeline from Angarsk, include a number of agreements on technology exchange (for example, between Tatneft and Daqing), Gazprom's plans to transfer some PRC road transport companies to Russian compressed gas, an agreement to establish a joint committee on cooperation in the development of fields in the oil and gas regions of the Xinjiang Uygur Autonomous Region (XUAR) open to foreign investors and specific agreements on the supply of small quantities of Russian oil and oil products by rail.
In addition to those problems that are largely common for the entire oil and gas complex of Russia, which we highlighted in the previous article (GD Bessarabov, AD Sobyanin. Oil of China and Russia's prospects // Trans-Caspian project), we can add the following, vividly showing in the work of Russian gas companies:
1. Misunderstanding of the essence of negotiating partners
Talk about the danger of Chinese economic expansion for the Siberian and Far Eastern regions of Russia is based primarily on the fact that China is the most dynamically developing market in the region, which in the near future will be among the 2-3 largest economic players in the world. The danger is virtual for one simple reason: there is no China in Russia. In Russia, there is exclusively small Chinese business, which must be distinguished from the Chinese state itself. So far, Russia has few business contacts with the latter, and the Chinese state is not particularly interested in Russia.
It should be remembered that China has a tradition of civil service and bureaucracy for several thousand years. This gives rise to the peculiarities of doing business and negotiations, which we will talk about below. The main problem of Russian companies is that, firstly, they do not want to admit that it is necessary to deal with the state in China, and secondly, they mistakenly believe (the few who nevertheless admit this) that state bureaucracy in China is similar to the state bureaucracy in Russia, and all problems can be solved just as easily with a couple of bribes and "the right people" in the highest state structures.
2. Inconsistency of positions within Russian companies, companies among themselves and companies with the state
At one time, precisely because of the inconsistency of the positions of the government and Russian manufacturers, Russia lost the tender for the supply of equipment for the largest hydraulic structure in the world - the Sansya HPP under construction in China, although at first it was Russian machine builders that were considered preferable for the supply of hydraulic turbines. The inconsistency of positions is no less destructive for the oil and gas complexes. In negotiations with the Chinese side, Russian enterprises have to deal primarily and mainly not with entrepreneurs, but with officials, for whom the main task is to minimize any risk and relieve themselves, as far as possible, of responsibility.
Therefore, as soon as any kind of disagreement appears in the depths of the Russian side itself (struggle between shareholders; inconsistency between the positions of the company and the Russian state; even competition between companies, which is natural for a capitalist society), the Chinese side immediately takes a wait-and-see attitude and does not make ANY decision. In this case, Russian enterprises should take advantage of the experience of Western companies that have been successfully working in China for a long time: through lengthy and no matter how stormy discussions in their country, develop a common position and then, already at the negotiations in China, act only as a united front, adhering to the previously agreed point of view and, to a certain extent, the division of spheres of influence (types of activities and
specific projects).
3. Haste
China is not only a bureaucratic state, but also a planned one. Therefore, nothing is done quickly in it. Any enterprises associated with the oil and gas complex develop slowly (several years of negotiations, 2-3 years for engineering surveys, 2-3 years for construction), and in China all these periods are additionally increased. Accordingly, the time for making decisions is lengthening, and attempts to reach agreements in several months should be abandoned.
4. Work "swoops"
From the previous one follows another mistake typical for Russian companies - the desire to work in China in a Western style, with short business trips and pre-scheduled meeting schedules. For successful work in China, it is necessary, firstly, to have a “long” strategy, calculated for a decade in advance, and secondly, permanent representations in all key points. It is almost impossible for an oil or gas company to do business in China without having permanent offices in Lanzhou, Chongqing, Daqing, and Harbin.
To be successful, company employees on the ground must “track” everything, up to changes in the mood of the official on whom the progress of the project depends. Coming to Beijing just to approve documents means repeating the numerous losses of billions of Chinese orders, like the supplies of equipment for nuclear and hydroelectric power that went to the West or the ousting of Gazprom from the position of a promising partner in the field of gasification of China. It is no coincidence that of all the companies in the oil and gas sector in Russia, RUSIA Petroleum is doing best, the main shareholder of which is BP Amoco, which has extensive successful experience in the PRC.
To do business in China, it is not enough to know the business perfectly. You need to know China perfectly.
LITERATURE:
1. BP Amoco Statistical Review of World Energy. 1994.
2. Energy in Japan. 1989, # 5.
4. OPEC Petroleum (general review). 1997-1998.
5. OPEC Petroleum. 1993, # 2.
6. Petroleum Economist (review). 1997-1999.
7. Petroleum Economist. 1995, # 9.
8. Ibid. 1996, no. 1.
9. Ibid. 1996, no. 2.
10. Ibid. 1997, no. 2.
14. State Petroleum and Chemical Administration (China). 1999.
15. Wood Mackenzie Statistical Review.
21. IVD RAS, express information. 1996, No. 5.
23. International life. 1999, No. 10.
24. Oil and gas vertical. 1999, No. 2-3.
25. Ibid. 2000, no. 2.
26. Oil of Russia. 2000, no. 2.
29. Expert. 2000, No. 13.
30. China in the XXI century. Abstracts // IFES RAS. M., 2000.
31. Oil and gas vertical. 2000, no. 11.
32. Expert, 2000, No. 45.
33. Oil and gas vertical. 2000, No. 7-8.
34. Nezavisimaya Gazeta, 27.02.2001.
35. Financial and economic bulletin of the oil and gas industry. 2000, No. 4.
36. Oil and gas vertical. 2000, no. 12.
37. Izvestiya RAN. Energy. 2000, No. 6.
38. Izvestiya RAN. Energy. 2000, No. 1.
39. Kommersant, March 16, 2001.
40. Trans-Caspian project, 22.02.2001.
Georgy Dmitrievich BESSARABOV - Leading Researcher, Department of Asia and the Asia-Pacific Region, Russian Institute for Strategic Studies
Alexander Dmitrievich SOBYANIN - Deputy editor-in-chief of the analytical magazine "Profi"
In less than a decade, China has grown into one of the world's largest gas markets and a major importer of LNG. Part of the gas supplies is provided by domestic production, part is imported into the country through pipelines and through LNG terminals.
Coal remains the main source of power generation in China. According to official figures, in 2014, 64.2% of the country's electricity was generated by coal-fired power plants. The government has pledged to cut the share of coal to 62% by 2020. By the same time, the contribution of gas to power generation will exceed 10%, which is significantly more than the 6% share registered in 2014. Industry is the main consumer of gas in China. Other consumers are the residential sector, power generation and transport.
China is highly dependent on imports of oil and gas, and its dependence on both fuels has grown dramatically in recent years. The country has several trunk cross-border pipelines through which gas comes from the countries of Central Asia and Myanmar. China is also building a pipeline in the northeast, which is to begin importing Russian gas from Eastern Siberia by the end of this decade.
China is the largest source of greenhouse gases in the world, and the country's leadership has pledged that carbon emissions will peak by 2030, although many expect that to happen sooner. To reduce greenhouse gas emissions, China will have to use many more renewable energy and gas sources. Renewables are expected to play an important role in China's electricity supply over the next several decades. The government has pledged to bring the share of non-fossil fuels to 20% by 2030.
As the cleanest fossil fuel, gas will undoubtedly play an important role in the future energy supply of China, and this will increase the demand for LNG. Both state oil companies and independent firms are building a number of new import terminals in the country. The country is also seeking to expand domestic production, with a focus on shale gas and deepwater resources. It is estimated that China's recoverable shale gas reserves exceed 25 trillion cubic meters.
Statistics
Over the past 10 years, China's natural gas production has more than tripled. Today, China is one of the largest natural gas producers in the world. The development of offshore fields and unconventional reserves means that gas production in China will continue to grow.
Over the past decade, gas consumption in China has grown very rapidly. Until 2008, production and consumption were approximately at the same level, but in 2008 consumption began to exceed production in significant volumes, and China has become one of the world's largest gas importers.
Gas demand growth slowed in 2015 due to an overall slowdown in economic growth and unfavorable market conditions for gas. Despite falling prices, LNG imports are expected to decline this year as LNG has to compete with pipeline supplies from Central Asia.
China uses gas in many different ways. Almost half of all gas used is used for heating residential and industrial sectors, while electricity generation ranks third in the list of possible uses. Significant volumes of gas are also used in the energy industry and as feedstock for the petrochemical industry.
Domestic companies
China's three state-owned oil companies have established a foothold in the gas distribution sector, gaining control over all gas supplies and a near-monopoly position in the domestic gas market. Prior to that, the three companies secured a practical monopoly over gas exploration and production projects and over the import and transport of gas through pipelines.
China National Petroleum Corp.
China National Petroleum Corp. (CNPC) is a state-owned oil and gas company. While its focus is on internal resource development, the company has a significant portfolio of international investments and projects in 29 countries around the world.
The company divides its activities into six main areas. The first area is the exploration and production of oil and gas, processing, transportation and trade in these fuels. Other areas of activity are engineering and design services, geophysical exploration methods and the production of drilling and rescue equipment. Capital control and regulation, financial and insurance services are a separate line of business. The last direction is the development of a new energy base, the central task of which, in turn, is the development of unconventional reserves and the introduction of technologies for the use of renewable energy sources.
The company has formed a number of joint ventures with major international oil companies to develop oil fields in China itself, especially with regard to coal bed methane and shale gas reserves.
Sinopec
Sinopec is China's largest manufacturer and supplier of light petroleum products and refined petroleum products. It is an integrated (diversified) oil company operating in many areas - from exploration to the sale of refined products, from fuel transportation to import and export operations.
Sinopec is listed on the Chinese and international exchanges, but it is controlled and funded by the Chinese government. The company is developing five exploration and production projects to increase production. These projects are the Shengli oil field, the Tarim basin, the Ordos basin, the Sichuan basin, as well as unconventional oil and gas reserves.
China National Offshore Oil Corp.
China National Offshore Oil Corp. (CNOOC) is developing four key areas in Bohaiwan, East China Sea, and the eastern and western parts of the South China Sea. Bohaiwan is considered to be the most important oil production site with a 101.8% replacement rate and significant potential for expansion.
The company has entered into a number of production sharing agreements with foreign partners to develop offshore oil and gas fields. The company also owns stakes in oil and gas fields in Indonesia, Australia, Nigeria, the United States and Canada.
LNG terminals
Beihai LNG Terminal
Located in Guangxi Autonomous Region, Beihai Terminal, with a declared capacity of 3 million t / y, received its first cargo, which arrived on the BW Pavilion Vanda LNG carrier, on March 27, 2016. The LNG carrier completed its mooring at the terminal dock on March 28 and began transferring cargo on April 1. The cargo came from the Australia Pacific liquefaction plant, with which Sinopec signed an agreement to purchase 7.6 million tons of LNG per year.
Caofeidian-Tangshan LNG Terminal
| Running | 2013 |
| Location | Tangshan, Hebei |
| Power | 3.5 million tons / year |
| Unloading berths | 1 |
| Storage volume | 640 million cubic meters |
| Operator | PetroChina |
| Shareholders | Petrochina, 51%; Beijing Enterprises Group, 29%; and Hebei Natural Gas, 20% |
| Website | www.petrochina.com.cn |
PetroChina's third LNG terminal supplies gas to Beijing and Tianjin. Gas is supplied through the Yongqing-Tangshan-Qinhuangdao pipeline, 312 km long, which connects to the Shaan Jing pipeline network that supplies Beijing. The company has plans for the second stage of the project, which will increase the regasification capacity to 6.5 million tons / year, and the third stage, which will bring the capacity to 10 million tons / year.
LNG terminal "Dalian"
| Running | December 2011 |
| Location | dalian port, Liaoning province |
| Power | 6 million tons / year |
| 8.5 billion cubic meters / year | |
| Unloading berths | 1 |
| Berth capacity | 267 million cubic meters |
| Storage volume | 480 million cubic meters |
| The cost | 4.7 billion yuan |
| Operator | PetroChina |
| Shareholders | PetroChina Kunlun Gas Co., 75%; Dalian Port Authority, 20%; and local companies 5% |
| Website | www.cnpc.com.cn |
PetroChina's second LNG terminal is connected to the Northeast Gas Pipeline to supply gas to consumers in northeastern China. The first trial shipment was received from Qatar in November 2011.
The terminal's capacity has been expanded to 6 mtpa, up from only 3 mtpa at launch. Today, the volume of gas supplied from the terminal is 8.5 billion cubic meters per year.
The terminal will receive LNG under the contracts signed by PetroChina with QatarGas 4 and the Australian Gorgon LNG project.
The terminal was the first of China's LNG terminals to offer a bulk breakdown service, loading small vessels to deliver LNG along the coast.
LNG terminal "Dapheng"
| Running | September 2006 |
| Location | Dapheng, Guangdong |
| Power | 6.8 mln tons / year |
| Evaporators | 9 sets |
| Unloading berths | 1 |
| Berth capacity | 217 million cubic meters |
| Storage volume | 480 million cubic meters |
| The cost | $ 3.6 billion |
| Operator | Guangdong Dapeng LNG Co. |
| Shareholders | CNOOC, 33%; BP, 30%; Guangdong Province Consortium, 31%; and two Hong Kong utility companies, 6% |
| Website | www.dplng.com |
Dapheng is China's first LNG terminal and is part of a larger infrastructure project that included the construction of a gas pipeline, four LNG power plants, the conversion of a fuel oil power plant to a gas one, and shipbuilding projects.
The initial capacity of the terminal was 3.7 million tonnes / year, and then it was expanded to 6.8 million tonnes / year.
Since November 2007, the terminal has also been providing tanker loading services.
Dapheng Terminal receives LNG from the third stage of the QatarGas project and from the Australian Northwest Shelf project. About two-thirds of the imported gas is used to generate electricity, and the rest is supplied to the residential sector.
Dongguan LNG Terminal
This is the first privately owned LNG terminal. His work began with the purchase of a cargo of 36 thousand tons of LNG from the Malaysian company Petronas, which was delivered on September 17, 2013. The contract for the second batch of LNG imports was signed by the terminal in March 2014 for delivery in May. The cargo was delivered by a vessel with a capacity of 76 thousand cubic meters (35 thousand tons). The terminal is equipped with two storage tanks with a volume of 80 million cubic meters each, as well as a number of small tanks, thanks to which the total storage volume is 170 million cubic meters. The terminal also possesses storage tanks for 132 thousand cubic meters of oil products and 125 thousand cubic meters of petrochemicals. According to the terminal operator Jovo, the terminal's berth can receive vessels with a displacement of about 50 thousand tons or 80 thousand cubic meters.
LNG terminal "Hainan"
| Running | august 2014 |
| Location | Special Economic Zone "Yangphu", Hainan |
| Power | 3 million tons / year |
| Unloading berths | 1 |
| Berth capacity | 267 million cubic meters |
| Storage volume | 320 million cubic meters |
| The cost | 6.5 billion yuan ($ 1.05 billion) |
| Operator | CNOOC |
| Shareholders | CNOOC, 65%; and Hainan Development Co., 35% |
| Website | www.cnooc.cn |
The construction of the plant began in August 2011. The 114 km long pipeline with a throughput capacity of 13.8 billion cubic meters supplies gas from a terminal in the Hainan province network. There are also plans to build a pipeline across the Huinan Strait to Guangdong.
The terminal received its first cargo in August 2014. The gas was delivered on the Rasheeda LNG tanker with a capacity of 210 million cubic meters. The facility is the second such terminal in China with the ability to distribute large shipments of fuel to smaller ones, loading small vessels for shipping along the coast.
LNG terminal "Ningbo-Zhejiang"
| Running | Sep 2012 |
| Location | beilun Port, Ningbo, Zhejiang Province |
| Power | 3 million tons / year |
| Unloading berths | 1 |
| Berth capacity | 267 million cubic meters |
| Storage volume | 480 million cubic meters |
| The cost | 6.79 billion yuan ($ 1.1 billion) |
| Operator | CNOOC |
| Shareholders | CNOOC, 51%; Zhejiang Energy Co., 29%; and Ningbo Power, 20% |
| Website | www.cnoocgas.com |
The fourth LNG terminal of China National Offshore Oil Corp., also the sixth LNG terminal in China as a whole, supplies gas to the gas distribution networks of Zhejiang. The LNG supply contract was signed with the QatarGas 3 project.
The second phase of development envisages the expansion of the terminal's capacity to 6 million tons / year.
LNG terminal "Putian-Fujian"
| Running | february 2009 |
| Location | Putian, Meizhou Bay, Fujian Province |
| Power | 6.3 million tons / year |
| Unloading berths | 1 |
| Berth capacity | 165 million cubic meters |
| Storage volume | 320 million cubic meters |
| Operator | CNOOC Fujian Natural Gas Co. |
| Shareholders | CNOOC, 60%; and Fujian Investment and Development Co., 40% |
| Website | www.cnoocgas.com |
The country's second LNG terminal, Putian, was created to address the energy shortage in Fujian province. The terminal received its first cargo in April 2008, but commercial operation of the facility began only in February 2009. The receiving capacity of the terminal was expanded from 2.6 million tons / year to 5.2 million tons / year, and then to 6.3 million tons / g. The LNG produced is mainly sold to power plants and gas distribution companies in the surrounding regions.
The main source of supply is the Indonesian Tangguh LPG plant. LNG from the terminal goes to power plants and gas distribution companies in Putian, Xiamen, Fuzhou, Quanzhou and Zhangzhou, Fujian province.
Qingdao-Shandong LNG Terminal
| Running | december 2014 |
| Location | zhoucun Port, Shandong |
| Power | 6.1 million tons / year |
| Unloading berths | 1 |
| Storage volume | 640 million cubic meters |
| The cost | $ 2 billion |
| Operator | Sinopec |
| Shareholders | Sinopec; Shandong Shihua Natural Gas Corp .; Shandong Natural Gas & Pipeline Co. |
| Website | www.sinopecgroup.com |
Qingdao Terminal is Sinopec's first LNG terminal. Gas from the terminal will be delivered to the Dong Jia Khou port and Shandong province via a 440 km pipeline.
The first gas was delivered in November aboard the LNG tanker Maran Gas Coronis, which arrived from the Atlantic LNG plant in Trinidad. The LNG tanker arrived on November 14, 2014 and started shipping LNG ashore on November 18. Regasified LNG began to flow to the city's gas supply pipes on 3 December.
The first cargo under the long-term contract was delivered to the terminal on 13 December aboard the Gaslog Chelsea from the PNG LNG plant. Sinopec has signed a contract with this plant, operated by ExxonMobil, for the annual supply of 2.5 million tons of LNG.
The terminal's initial capacity of 3 mtpa was expanded to 6.1 mtpa when the construction of the fourth storage tank was completed in September 2015.
LNG terminal "Rudong-Jiangsu"
| Running | 2011 november minutes |
| Location | yankhou Port in Rudong, Jiangsu Province |
| Power | 6.5 mln tons / year |
| Volume of gas supplied from the terminal | 9.1 billion cubic meters / year |
| Unloading berths | 1 |
| Berth capacity | 267 million cubic meters |
| Operator | PetroChina |
| Shareholders | PetroChina Kunlun Gas Co., 55%; Pacific Oil & Gas, 35%; and Jiangsu Guoxin Investment Group 10% |
| Website | www.cnpc.com.cn |
Rudong Terminal is PetroChina's first LNG terminal and the fourth in China overall. He received his first shipment from Qatar in May 2011, and began commercial operations in November of the same year. Deliveries to this terminal marked the first time that Q-flex and Q-max LNG tankers arrived in China.
Gas from the terminal either enters the West-East pipeline network, through which it enters the eastern and central regions of China, or is transported in tank trucks to remote areas in the lower reaches of the Yangtze River.
In early 2016, the terminal's capacity was increased to 6.5 million tons / year. Initially, its capacity was 3.5 million tons / year, and long-term plans provide for an expansion of capacities to 10 million tons / year.
Terminal manager PetroChina signed a 25-year LNG supply contract with Qatargas 4.
LNG terminal in Shanghai
| Running | october 2009 |
| Location | Hangzhou, Shanghai |
| Power | 3 million tons / year |
| Unloading berths | 1 |
| Berth capacity | 200 million cubic meters |
| Storage volume | 480 million cubic meters |
| The cost | 4.6 billion yuan |
| Operator | Shanghai LNG Co. |
| Shareholders | CNOOC Gas & Power, 45%; and Shenergy Group Co., 55% |
| Website | www.cnoocgas.com |
| Website | www.shenergy.com.cn |
The terminal received its first cargo in October 2009 and signed a 25-year contract to purchase 3 million tonnes of LNG per year from Malaysia. Deliveries began in 2011. The resulting gas is supplied to the Shanghai region.
Floating storage and regasification unit "Tianjin"
| Running | 2013 |
| Location | binhai Port, Tianjin |
| Name of the vessel | GDF Suez Cape Ann |
| Regasification power | 2.2 million tons / year |
| Tank volume on the ship | 145 million cubic meters |
| Ship owner | Hoëgh LNG |
| Charterer | GDF Suez; sub-chartered by CNOOC |
| Freight term | 5 years |
| Shareholders | CNOOC Gas & Power, 46%; Tianjin Port, 20%; Tinajin Gas 9%; and Tianjin Hengrongda Investment, 5% |
| Website | www.tjlng.com.cn |
China's first floating storage and regasification unit supplies gas to Tianjin and Beijing. CNOOC plans to expand the facility to become the largest LNG storage center in the Beihai economic zone, equipping 12 LNG storage tanks with a capacity of 160 thousand cubic meters each.
LNG Terminal "Zhuhai-Jinwan"
| Running | october 2013 |
| Location | Nanjing, Guangdong |
| Power | 3.5 million tons / year |
| Unloading berths | 1 |
| Berth capacity | 250 million cubic meters |
| Storage volume | 480 million cubic meters |
| Operator | CNOOC |
| Shareholders | CNOOC, 30%; Guangdong Yuedian Group, 25%; Guangzhou Development Gas, 25%; Guangdong Yuegang Energy, 8%; and other local companies, 12% |
| Website | www.cnoocgas.com |
The second LNG terminal, built in the southern province of Guangdong, is operated by CNOOC. The terminal received its first cargo in October 2013. Gas from the Zhuhai-Jinwan terminal will be sent to four cities - Guangzhou, Foshan, Zhuhai and Jiangmen - via a 291 km pipeline. There are plans to expand the terminal's capacity to 11.87 million tons / year.