my presentation on lng import from china (study)

Chinese LNG Market

Sept 23, 2013By Otgontugs

Power Systems Division

• China’s natural gas production has a compound average growth rate of about 14%.

• China’s natural gas reserve is estimated to have reached 56 trillion cm;

• As of 2010, there were three major gas production bases under CNPC. The first is Changqing field, Ordos basin, with 21 bcm/y ; the second is Tarim field, Tarim basin, with 18 bcm/y ; the third is Sichuan field, Sichuan Basin, with 15 bcm/y

• Key player: CNPC/Petrochina, CNOOC, SINOPEC, China Gas and ENN.

Natural Gas in China

China’s Gas Demand Projection unit : bcm/y

2005 2010 2015 2020

CNPC 2002 63.7 106.8 153.4 210.7

CNPC 2006 120.0 200.0

CNPC 2009/10 300.0

CNPC 2011 350.0

Sinopec 2006 140.0 240.0

ERI 2002 64.5 120.0 160.0 200.0

ERI 2010 200.0 300.0

ERI 2011 230-40

NEA 2010 260

Xinhua 2010 270-300

Cnooc 2002 61.0 100.0 150.0 200.0

Source : K-W Paik, Sino-Russian Oil and Gas Cooperation

Natural gas map of China

Pipelines

Terminals

From Central Asia

From West SiberiaFrom East Siberia

From

Sakhalin

From Myanmar

Gas basin

China LNG Development Process

• Chinese imports of LNG project was officially launched in 1995.

• Since the beginning of this century, Chinese small and medium sized LNG plants develop rapidly.

• November 2000, China's first LNG peak shaving plant built in Shanghai.

• November 2001, China's first commercial operated LNG plant built in Henan Puyang.

• September 2004, LNG plant, with 1.5 Mcbm/day capability, put into operation in Xinjiang. This was the largest liquefaction plant.(Xinjiang Guanghui)

LNG Market in China

• Daily LNG production: 15,675 kcm/day

• 10 LNG terminals, 202 LNG plants (existing, constructing and planning) in China by Apr 12, 2013.

• 19 plants in operation within 660 km range from Mongolia.

China LNG drivers

LNG import dependency

• China became a net

importer of NG in 2007.

• Imported about 17 bcm of

natural gas in 2010.

• It is 16% of total gas

consumption in 2010.

LNG plants near Mongolia

Gashuun Sukhait

/ Gantsmod border

Bayannur

/ 3 plant

Dengkou

/ 3 plants

Wuhai

/ 2 plants

Yinchuan

/ 4 plants

Baotou

/ 5 plants

Ordos

/ 13 plants

Yulin

/ 2 plants

Zamiin uud

/ Erlian border

Tumed

/ 1 plant

Zhuozi

/ 1 plant

Xianghuangqi

/ 1 plant

Zhangjiakou

/ 1 plant

Electricity from LNG

LNG cost at Chinese Border

No City Distance to

Border km

Transportation

RMB/ton*km

Remark

1 Bayannuur 291 0.82-0.95 3 plants

2 Dengkou 355 0.82-0.95 1 plant

3 Baotou 370 0.82-0.95 5 plants

4 Ordos 514 0.82-0.95 4 plants

5 Yinchuan,

Ningxia

600 0.82-0.95 2 plants

6 Yulin, Shaanxi 661 0.82-0.95 3 plants

7 Xianghuangqi 261 0.82-0.95 1 plant

Number of plants within 660 km range from Mongolia 19 plants

Transport rate calculated as 0.82-0.95 RMB/ton*km

BayanNuur, Innermongolia

No Company Name City Dist

km

EXW

price

RMB/ton

Trans

RMB/ton

Total

RMB/ton

1 Hengtai New Energy

(1419)

Bayan

nuur

291 4475 276 4751

2 Innermongolia Huida

(1450)

Bayan

nuur

291 4650 276 4926

3 Bayannuur Huaqi (sub

Petrochina, 1450)

Bayan

nuur

291

4 Dengkou Desheng

NatGas (1450)

Deng

Kou

355 4475 337 4812

(1419) - 1419 m3/ton, gasification rate

Dist – distance to Nariin Sukhait / Gantsmod Border.

EXW price - price of Sep 14, 2013.

Trans – transport rate calculated as 0.95RMB.

Baotou, Innermongolia

N

o

Company Name City Dist

km

EXW

price

RMB/ton

Transpor

t

RMB/ton

Total

RMB/ton

1 Baotou Huanda New

Energy (1424)

Baotou 370 4700 352 5052

2 Shiyi New Energy

(1488)

Baotou 370 4800 352 5152

3 Baotou Xinyuan (1450) Baotou 370

4 Baotou Hengtong New

Energy(1434)

Baotou 370 4800 352 5152

5 Wante (Baotou,1460) Baotou 370 4800 352 5152





Ordos, Innermongolia

N

o


km

EXW

RMB/t

Trans

RMB/t

Total

RMB/t

1 Ordos Xingxing Energy (1450) Ordos 514 4650 488 5138

2 Juchang New Energy (1450) Ordos 514 4650 488 5138

3 Xinsheng (1488) Ordos 514 4600 488 5088

4 Shitai Natural Gas (1462) Ordos 514 4500 488 4988





Yinchuan, Ningxia

N

o


km

EXW

price

RMB/ton

Transpor

t

RMB/ton

Total

RMB/ton

1 Ningxia Hanas (1487) Yinchuan 600 4600 570 5170

2 Ningxia Clean

Energy(1496)

Yinchuan 600 4500 570 5070





Yulin, Shaanxi

N

o

Company name City Dist

km

EXW

price

RMB/ton

Transpor

t

RMB/ton

Total

RMB/ton

1 Shaanxi Lvyuan Gas

(1460)

Yulin 661 4750 628 5378

2 Zhongyuan Green

Energy (1450)

Yulin 661 4600 628 5228

3 Jingbian Xilan (1479) Yulin 661 4800 628 5428





Xiliin Gol

N

o

Company name City Dist

km

EXW

price

RMB/ton

Transpor

t

RMB/ton

Price at

Border

RMB/ton

1 Xianghuangqi

Green Energy

(1380)

Xianghuangqi 261 5000 248 5248


Dist – Distance to Zamiin Uud / Erlian Border



HS code of LNG: 27111100

Chinese side

• Import tax : 20%

• Export tax : 0%

• VAT : 13%

• Customer tax : 0%

• Unit : kg

Mongolian side

• Import tax : 5%

• Export tax : 0%

• VAT : 10%

• USD/ton price include Mongolian Custom tax and VAT.• Transportation fee : 0.50 USD/km*ton• Exchange Rate : 1 USD = 6.14 RMB.• Gasification rate : 1450 m3/ton.

LNG Cost of Southgobi site

Cost atGantsmod

OT TT Remark

RMB/ton USD/ton USD/ m3 USD/ton USD/m3

4800 953 0.66 1038 0.72

5000 991 0.68 1076 0.74

5200 1029 0.71 1114 0.77

Distance from border km

100 km 270 km Gashuun-Sukhait border

Cost of electricity at SouthGobi

Site Gen type

Fuel cost USD

Fuel Con-sumption

PowerekW

Cost ofUSD/kW*hr

Saving Rate %

OT Gas 0.66 /m3 319 m3/h 1106 0.190 42

0.68/m3 319 m3/h 1106 0.196 40

0.71/m3 319 m3/h 1106 0.205 37

Diesel 1.22 /L 292.1 L/h 1095 0.326

TT Gas 0.72 /m3 319 m3/h 1106 0.208 32

0.74/m3 319 m3/h 1106 0.213 30

0.77/m3 319 m3/h 1106 0.222 27

Diesel 1.14 /L 292.1L/h 1095 0.305

• Exchange Rate : 1 USD = 1638 MNT.• Diesel cost at OT: 2000 MNT, TT: 1870MNT.• Power calculated as 0.75% load.

Cost of electricity at UB:

No Cost type USD Remark

1 Cost at Chinese border 855 /ton Xianghuangqi LNG

5248RMB/ton

2 Custom tax & VAT 132.5 15.5% of cost

3 Cost include Custom tax &

VAT

987.5 /ton

4 Transportation 106.5 /ton From Zamiin Uud to

UB, 0.15USD/ton*km

5 Cost in UB 1094 /ton

6 Cost in UB 0.793 / m3 Gas rate: 1380m3/ton

USD/kW*h

7 Gas Genset 0.229 Can be CHP

8 Diesel Genset 0.285 1750 MNT/L

9 Electricity (Central Grid) 0.056-0.067 96-110 MNT/kW*h

Saving rate around 20%, for Gas vs Diesel

Gas Generator

• Cat 3516C Island mode Gas engine.

• Power rating: 1475ekW (50Hz Continuous)

• 75% load Fuel Consumption: 9.92 MJ/kW*h 0.286m3/kW*h

•

Diesel Generator

• Cat 3516 TA, V-16, 4-Stroke Water-cooled Diesel.

• Power rating: 1460ekW (50Hz Prime)

• 75% load Fuel Consumption: 292.1 L/hr 0.267 L/kW*hr

•

LNG Applications

• .

LNG Gasification Station

• .

LNG

LNG storage

• CNG – Compressed natural gas.

CNG Taxi in China : fuel saving rate: 50%

16 LNG Public Bus in Guangdong

LNG truck in China

• Installed 2 pcs 450L storage banks, after fully charged

can travel about 1,000 km.

LNG fuel saving rate for Bus, Truck.

In UB, Mongolia

Fuel type Diesel LNG Gas #92 LNG

Fuel consumption 42.5 L 40kg 56 L 40kg

Fuel price $ 1.068 $1.094 $ 0.989 $ 1.094

Price for 100 km $ 45.39 $ 43.76 $ 55.38 $ 43.76

Saving Rate (%) $ 1.63 (3.6%) $ 11.62 (21%)

Saving for 1 year

(300 day / year, 400

km per day)

$ 1956 $ 13944

In China

Fuel price RMB 7.4 5.5 7.41 5.5

USD 1.205 0.896 1.207 0.896

Price for 100 km, RMB 314.5 220 415 220

Saving Rate RMB (%) 94.5 (30%) 195 (45%)

LNG conversion of Heavy Equipment (in USA)

• Caterpillar 966F II Wheel Loader

• Fuel saving over 9000 hrs: $23,400 or 17%.

LNG conversion of Heavy Equipment (in USA)

CIMC ENRIC’s First LNG Railway Tank Container in China

LNG Economy

• Spread still high in future projection.

Projected price of Oil and Natural Gas

World LNG Estimated October 2013 Landed Prices

Natural Gas Map of Russian Federation

Russia have 8 LNG terminals only:• 1 Existing LNG terminal (Sakhalin)• 3 projects in preparation (Vladivostok, Pechota, Yamal)• 3 projects under consideration (Black Sea, Kamchatka, Chukotka)• 1 project suspended (Shtokman)

• Traditionally major LNG buyer since the inception of international LNG business in the 1960’s.

• The largest LNG importer in the World.• Fukushima nuclear power accident and

consequences to energy supply sources for power generation• Immediate solution – fuel oil, LNG• LNG annual import increased by 12.2% (to 79 m

tons in 2011).• Mid-term – shifting interest to renewables and

coal but LNG is expected to remain a significant supply source.

Nuclear accident in Japan, March 11, 2011

• Electricity (CHP) from LNG is economical (compared with Diesel) in Mongolia.

• Mining company within 300 km range from border port, have good saving on LNG.

• LNG use as vehicle fuel, have not much saving in UB.• China is net importer of energy, Russia is net

exporter. Need to depth study for Russia.• The Long term Sale and Purchase Agreement (LNG) .• LNG is expected to remain a significant supply

source for the WORLD.

Conclusion

• 1 ton = 2204.62 pounds • 1 kL (kLiter) = 1 cm (cubic meter)• 1 kCal (kCalories) = 4.187 kJ = 3.968 Btu• 1kJ (kJoules) = 0.239 kCal = 0.948 Btu• 1Btu = 0.252 kCal = 1.055 kJ• 1kWh = 860kCal = 3600 kJ = 3412 Btu

Unit Conversion

MMBtu ton kcm

1MMBtu 1 0.021 0.028 Million British thermal unit

1 ton (LNG) 48.6 1 1.36 1.45 kcm (Chinese LNG)

1 kcm 35.7 0.74 1 kilo cubic meter

Thank you

my presentation on lng import from china (study)

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