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China LNG Weekly

Contents

China Gas Focus News

>>$137.7 Billion Gas Related in President Xi & Trump's 'Great Chemistry' Deal >> CNEIG, 4th Energy Giant of China, Weighs Anchor

>> 17th U.S.-China Oil & Gas Industry Forum in Ningbo, China >> China Resource Tax Reduction Enters Consultation Stage Progress Update

Special: Winter Heating Peak in China

>> Gas Requisition to Drive China LNG Price Accruing

In-depth View >> Import Data: Advancing LNG in China >> Status Quo of China LNG Tanker Truck Market: Parc at 9,106

And

>>1 China LNG 3 LNG Plants Production LNG Terminals Supply LNG Consumption LNG Import Report

>>2 China Pipeline Gas Fundamentals..6 >>3 China Gas Price 8 International Prices China LNG Prices China Pipeline Gas Prices

21

Fundamental Data LNG Price Data Pipeline Gas Price Data

Prices, News, Fundamentals & Analysis

November 2017

China Gas Monthly

$137.7 Billion Gas Related in President Xi & Trump's 'Great

Chemistry' Deal

On November 9, 2017, China President Xi and U.S. President

Trump witnessed the signing of some cooperation

agreements between China and U.S. corporations with the

total sum of $253 billion.

In this deals pack, natural gas related projects took up over

$137.7 billion of the total $253 billion. Including which, China

Energy Investment Corp. (CNEIC, previously known as China

Shenhua Group) planned to invest $83.7 billion in shale gas

and chemical manufacturing projects in West Virginia

spreading out over 20 years as stated in the memorandum

of understanding. China Petroleum & Chemical Corp.

(Sinopec) signed contract with Alaskan Government to

jointly develop LNG industry in Alaska with a totaled

investmen (Continued in page 11)

Note: China LNG Supply Map is built on base of provided data in Part 1.1 & 1.2; Shanghai Yangshan Terminal and Hainan Yangpu Terminal are for peak-shaving reserve and no tanker loading sales & price data are available.

Note: 1 tonne (mt) = 52 million Btu (mn Btu) = 1,428.5714 cubic meter (cbm) . Exchange rate of CNY(¥)/USD($) the end work day of the month (November 30, 2017 - 1: 6.6034).

2 / 21


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China Natural Gas SupplyConsumption (right axis) Production Import

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Dashboard

Note: The LNG data is updated at the end of the reported month, however, some natural gas data issued by authorities would be delayed for 20 days from the end of the month. Thus, only the natural gas data for the month before the reported month is available in this report.

3 / 21


In November participants welcomed the

new winter heating season with mixed feelings. On the one

hand, a great number of LNG plants suffered the feedstock

deficit from Mid-Nov due to pipeline gas compulsory

requisition. The ex-works at some plants in northern China

even doubled at the end of the month, but still the market

supply obviously shrank. On the other hand, terminals also

adjusted offers upwards, especially those in northern

China, because they also suffered higher regasification rate.

Both of the supplies from plants and terminals tightened,

leading to the multi-year high price at the end of the

month.

1.1 China LNG Plant Production

plants shut down in succession in northern China due to the feedstock pipeline gas had been taken for winter heating requisition. According to SCI, the feedstock gas supply dropped 4,765,000 cbm/day (173,446 mn Btu/day), and the total number of plants in shutdown or maintenance surged to 91. Therefore, the operating rate and production volume both dropped from last month.

The national average operating rate of LNG plants dropped to 42.52%, 5.25% lower than that of last month and 1.75% lower than the same month in last year. The 12-month average operating rate reached 42.52%. The daily output of LNG plants reached 42,860,000 cbm (1,560,104 mn Btu/day), down 4,765,000 cbm (173,446 mn Btu/day) from last month.

There were 91 plants in maintenance or long-term shutdown this month, 18 plants more than last month, and the total halted capacity reached 57,690,000 cbm/day (2,099,916 mn Btu/day), increased by 12,050,000 cbm/day (438,620 mn Btu/day) from last month.

From the current circumstances and outlook on the requisition in northern China, s LNG plants will continue to suffer the feedstock shortage for at least three months, and the situation may go even worse, because the requisition range and strength may both enhance soon in the future, allegedly.

>>LNG Plant Operating Rate (Regional Average) marked in Page 1 Supply Map in blue digits and coloration .

>>LNG Plant Production Volume (Daily Average) marked in Page 1 Supply Map in black digits .

>>Click to see details: Part 5 LNG Database => 5.1.1 China LNG Plant Turnaround & Shutdown Statistics

>>Click to see details: Part 5 LNG Database => 5.1.2 China Newly-Added LNG Plant Schedule

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2016 2017

1 China LNG Fundamentals

4 / 21


1.2 China LNG Receiving Terminal Supply (Tanker Truck Loading)

In October, the LNG receiving terminals tanker loading averaged at 31,306 mt per day (1,659,840 mn Btu/day), up 2,595 mt/day (134,940 mn Btu/day) from last month.

t just created a prominent historical record of 3.5 million mt per month in October, and it is estimated that the import volume was likely to approach 4 million mt in November and continue to skyrocket in the

rest days of this winter. However, most of Chinare owned by SOEs (14 of 16), and SOEs have obligations to help the peak-shaving. Thus, the overall regasification rate of terminals also boosted in November, and the LNG sales volume at terminals rose but only with limited increment.

>>LNG Receiving Terminal Tanker Loading Volume (Daily Average) marked in Page 1 Supply Map in orange digits .

>>Click to see details: Part 5 LNG Database => 5.2.3 November 2017 China LNG Import Statistics by Shipment

1.3 China LNG Consumption

1.3.1 China LNG Consumption Volume Analysis by Province

Province mt mn Btu Province mt mn Btu

Hainan 11,000 572,000 Jiangsu 155,000 8,060,000

Guangdong 245,000 12,740,000 Zhejiang 172,000 8,944,000

Guangxi 26,000 1,352,000 Shanghai 15,000 780,000

Henan 106,000 5,512,000 Shandong 225,000 11,700,000

Hubei 27,000 1,404,000 Fujian 74,000 3,848,000

Hunan 32,000 1,664,000 Anhui 69,000 3,588,000

Guizhou 18,000 936,000 Jiangxi 28,000 1,456,000

Yunnan 17,000 884,000 Shaanxi 80,000 4,160,000

Sichuan 20,000 1,040,000 Qinghai 14,000 728,000

Chongqing 12,000 624,000 Xinjiang 52,000 2,704,000

Xizang 8,000 416,000 Gansu 35,000 1,820,000

Inner Mongolia 40,000 2,080,000 Ningxia 17,000 884,000

Hebei 184,000 9,568,000 Liaoning 49,000 2,548,000

Shanxi 75,000 3,900,000 Heilongjiang 15,000 780,000

Tianjin 47,000 2,444,000 Jilin 28,000 1,456,000

Beijing 55,000 2,860,000 Total 1,951,000 101,452,000

Note: China's major LNG consumption areas concentrate in the southeast coastal areas. On one hand, these areas have higher economic levels, and they are more affordable to the natural gas prices. Both the natural gas and the LNG are widely-used in these areas. On the other hand, there are long distances between the coastal provinces and the major domestic natural gas producing areas.

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China LNG Terminal Tank Truck Sale Volume

2016 2017 3%

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China LNG Terminal Tanker Loading Statistics

DalianCaofeidianTianjin FSRUQingdaoRudongQidongNingboPutianYuedong YeyangShenzhen DapengDongguan JovoZhuhai JinwanBeihai

5 / 21


The long-distance pipelines are completed later. Before that, the demand is mostly supplied by the imported LNG resources from the LNG terminals. Thus, the LNG consumption volume in Zhejiang, Guangdong and Fujian is high.

1.3.2 China LNG and Alternative Energy Comparison

Vehicle LNG Vehicle Diesel Industrial Fuel LNG Industrial Fuel Oil

Price (¥/mt ) 8,150 7,590 6,260 3,820

Calorific value (MJ/kg) 53.65 40.17 53.65 40.96

Efficiency (¥/100MJ) 15.19 18.89 11.67 9.33

Efficiency ($/100MJ) 2.30 2.86 1.77 1.41

LNG/Alternative 80.40% 125.11%

Note: The vehicle LNG price is national average retail price, the vehicle diesel price is the highest celling price of 0# diesel, the industrial fuel LNG price is national average LNG delivered price, and the industrial fuel oil price is national average CST180 price.

As of the end of November, the LNG/Diesel price ratio rushed up to 80.40%. As for the industrial fuel, the LNG/Fuel Oil price ratio was 92.01%.

LNG consumption in industrial fuel field develops fastest in

price for industrial users was once lower than the pipeline natural gas price. However, compared with other fuels,

utilization in industrial fuel field is promoted by the

Nowadays, the LNG price has surged to a super high level in this winter, and the economic efficiency of LNG as fuel has gone, and the market may suffer pains from that, at least in this winter.

1.4 LNG Import Report October

The October LNG import volume in China reached 3,567kt (185,484,000 mn Btu), up 3.27% M-O-M and up 94.09% Y-O-Y. The average import price was at $388.02/mt ($7.46/mn Btu), up 3.66% M-O-M and up 10.55% Y-O-Y. The major LNG import origins were still Australia, Qatar, Malaysia, Indonesia and Papua New Guinea, and the U.S., Brunei, Nigeria, Equatorial Guinea and Egypt were newly

showed on the list.

In October 2017, China LNG receiving terminals totally imported 2,712.2kt (1,410,344,000 mn Btu) long-term contract LNG, down 0.62% M-O-M. The terminals imported 1,394.7kt (72,524,400 mn Btu) spot LNG, up 92.43% M-O-M.

Country Import volume(kt) M-O-M change Y-O-Y change

Average

import price

($/mt)

M-O-M change Y-O-Y change

China 3,567.00 +3.27% +94.09% 388.02 +3.66% +10.55%

Japan 6,137.40 +5.44% -10.07% 410.67 -1.86% +18.01%

South Korea 2,760.50 +16.55% -15.06% 419.85 -0.06% +11.07%

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>>Click to see details: Part 5 LNG Database => 5.2.1 October 2017 China LNG Import Statistics by Origin

>>Click to see details: Part 5 LNG Database => 5.2.2 October 2017 China LNG Import Statistics by Customs

1.5 LNG Plant & Terminal Gross Profit Analysis

Note: The calculation in the profit analysis are based on the same exchange rate (as listed in Page 1), and the assessment is based on the whole industry scale. Therefore, deviation may happen when it comes to specific time point in the past or specific terminal itself, and sometimes the deviation may be tremendous.

2.1 China Natural Gas Production

According to China NBS, in October 2017, China produced 12.4 billion cbm natural gas (451,360,000 mn Btu), up 15.9% Y-O-Y, imported 7.8 billion cbm natual gas (283,920,000 mn Btu), up 36.8% Y-O-Y, and the natural gas consumption reached 18.8 billion cbm (684,320,000 mn Btu), up 21.3% Y-O-Y.

From January to October 2017, the natural gas production totaled at 121.2 billion cbm (4,411,680,000 mn Btu), up 11.2%, the natural gas import volume totaled at 72.2 billion cbm (2,628,080,000 mn Btu), up 27.5% Y-O-Y, and the natural gas consumption volume totaled at 186.5 billion cbm (6,788,600,000 mn Btu), up 18.7% Y-O-Y.

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2 China Pipeline Gas Fundamentals


2.2 China Gaseous Natural Gas Import & Export

According to China GAC, in October 2017, China imported 7.8 billion cbm (283,920,000 mn Btu) of natural gas in total, Including 3.1 billion cbm (114,223,200 mn Btu)of gaseous natural gas and 4.7 billion cbm (169,696,800 mn Btu) of liquefied natural gas. The average import price of gaseous natural gas was ¥1.41/cbm ($5.87/mn Btu), up ¥0.02/cbm from August.

China imported gaseous natural gas mainly from the Central Asia countries, such as Turkmenistan, Uzbekistan and Kazakhstan, and someelse were imported via the China-Myanmar pipeline.

At the mean time, China exported gaseous natural gas mainly to Hong Kong and Macao. The export volume in October reached 13.4 trillion Btu to Hong Kong, and 0.8 trillion cbm to Macao.

Note: The natural gas export statistics by GAC include Hong Kong and Macao into export catalogue, however, those are

has no natural gas export.

Oct 2017 China Gaseous Natural Gas Import & Export Statistics

Import Volume (mn Btu) Avg. price ($/ mn Btu)

Export Volume (mn Btu) Avg. price ($/mn Btu)

Turkmenistan 87,214,400 5.70 Hong Kong 13,431,600 9.24

Uzbekistan 16,307,200 4.53 Macao 800,800 8.40

Myanmar 9,172,800 10.28

Kazakhstan 1,528,800 3.29

2.3 China Natural Gas Balance

Chinaconsumption all boosted in October, despite a drop in the pipeline gas import volume. The consumption growth rate in the first tem month reached 18.7%. As the winter heating season comes, it is foreseeable that the natural gas demand will further expand, and the coal-to-gas reform in North China will give certain extra support as well. It is predicted that the 2017 annual growth rate may go beyond 20%.

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China Natural Gas BalanceConsumption (right axis) Production Import

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3.1 International Prices

The NYMEX natural gas futures broke through $3/mn Btu again this week, in response to the coming of the cold weather. The price dropped to a monthly low last Friday due to the warm weather, however, as shown in the forecast, the temperature was about to drop soon, and participants chose to build up stocks. As of November 30, the NYMEX natural gas futures closed at $3.03/mn Btu, up $0.06/mn Btu from last week.

As in the weather forecast, the temperature will keep falling in the upcoming two weeks, driving demand to boom, despite uncertainties still existing. The U.S. natural gas stock crushed down by over 37 billion cu ft, and as reference, the five-year average dropped 47 billion cu ft.

3.2 China LNG Prices

According to SCI

closed at ¥5,752/mt ($16.75/mn Btu). monthly average LNG price was assessed at ¥4,821/mt ($14.04/mn Btu), up ¥569/mt ($1.66/mn Btu) from that of October.

Note: Deferential in changes is caused by exchange rate fluctuation.

LNG market price stable at the first two weeks of November, and then the winter heating season started on November 15 as in convention. Because of the pipeline gas requisition, not only the LNG regasification plants suffered

the feedstock deficit, but also LNG terminals increased the gasification rate, especially those terminals in northern China coastal regions. Therefore, as LNG supply shrinking,

and even doubled in some in-land regions at the end of the month.

Next month, in line with the shrinking supply of the plants and terminals and the increasing freight of LNG tanker trucks, it is predicted that the LNG spot delivered prices in some northern China regions will break through the threshold of ¥10,000/mt ($29.12/mn Btu), and this tide will not ease until government control involves.

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Source: SCI

$/bblInternational Crude Oil Prices

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Japan South Korea China

3 China LNG Prices


3.2.1 China LNG Plant Ex-works & LNG Receiving Terminal Tanker Loading Listed Prices:

>>Click to see details: Part 5 LNG Database => 5.3.1 China LNG Plant Ex-Works Price Statistics

>>Click to see details: Part 5 LNG Database => 5.3.2 China LNG Receiving Terminal Tanker Loading Listed Price Statistics

3.2.2 China LNG Tanker Delivered Prices by Province:

Province This month

(¥/mt ) Last month

(¥/mt ) MoM (¥/mt )

This month ($/mn Btu)

Last month ($/mn Btu)

MoM ($/mn Btu)

Shandong 7,200-8,300 4,700-4,900 +2,950 20.97-24.17 13.69-14.27 +8.59

Shanghai 6,400-6,500 4,600-4,800 +1,750 18.64-18.93 13.40-13.98 +5.10

Jiangsu 6,800-7,300 4,800-5,000 +2,150 19.80-21.26 13.98-14.56 +6.26

Zhejiang 5,100-5,400 4,900-5,200 +200 14.85-15.73 14.27-15.14 +0.58

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2016 2017

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Province This month

(¥/mt ) Last month

(¥/mt ) MoM (¥/mt )

This month ($/mn Btu)

Last month ($/mn Btu)

MoM ($/mn Btu)

Jiangxi 5,500-6,300 4,400-4,900 +1,250 16.02-18.35 12.81-14.27 +3.64

Hunan 5,200-5,500 4,150-4,550 +1,000 15.14-16.02 12.09-13.25 +2.91

Hubei 6,300-6,600 4,600-5,000 +1,650 18.35-19.22 13.40-14.56 +4.81

Henan 7,550-7,800 4,750-5,100 +2,750 21.99-22.72 13.83-14.85 +8.01

Zhuhai City, Guangdong 4,050-4,150 4,150-4,250 -100 11.79-12.09 12.09-12.38 -0.29

Chaoshan Region, Guangdong 3,850-4,200 3,800-4,400 -75 11.21-12.23 11.07-12.81 -0.22

Pearl River Delta Region, Guangdong 4,000-4,100 4,100-4,200 -100 11.65-11.94 11.94-12.23 -0.29

Yunnan 5,200-7,000 4,300-4,700 +1,600 15.14-20.39 12.52-13.69 +4.66

Guangxi 4,300-4,900 3,800-4,100 +650 12.52-14.27 11.07-11.94 +1.89

Guizhou 5,300-7,000 4,200-4,400 +1,850 15.43-20.39 12.23-12.81 +5.39

Fujian 4,200-4,400 4,200-4,400 - 12.23-12.81 12.23-12.81 -

Liaoning 6,300-8,800 5,000-5,600 +2,250 18.35-25.63 14.56-16.31 +6.55

Jilin 8,000-8,500 5,300-5,600 +2,800 23.30-24.75 15.43-16.31 +8.15

Hebei 7,900-8,600 4,600-4,750 +3,575 23.01-25.05 13.40-13.83 +10.41

Beijing 8,500-9,000 4,800-4,900 +3,900 24.75-26.21 13.98-14.27 +11.36

Tianjin 5,800-8,500 4,850-4,950 +2,250 16.89-24.75 14.12-14.42 +6.55

3.2.3 Retail Prices:

Click to see details: Part 5 LNG Database => 5.3.3 China City LNG Filling Station Retail Price

Click to see details: Part 5 LNG Database => 5.3.4 China City Diesel Filling Station Retail Price

Click to see details: Part 5 LNG Database => 5.3.5 China LNG Tanker Delivery Freight

2.3 China Pipeline Natural Gas Price

Click to see details: Part 5 LNG Database => 5.4.1 China Natural Gas Provincial Gate Fixed Price

Click to see details: Part 5 LNG Database => 5.4.2 China Natural Gas City Retail Price

Click to see details: Part 5 LNG Database => 5.4.3 China CNG Primary Station Price

News

$137.7 Billion Gas Related in President Xi & Trump's

'Great Chemistry' Deal

On November 9, 2017, China President Xi and U.S.

President Trump witnessed the signing of some

cooperation agreements between China and U.S.

corporations with the total sum of $253 billion.

In this deals pack, natural gas related projects took up over

$137.7 billion of the total $253 billion. Including which,

China Energy Investment Group (CNEIC, previously merged

by China Guodian Group and China Shenhua Group as

reported in the below topic) planned to invest $83.7 billion

in shale gas and chemical manufacturing projects in West

Virginia spreading out over 20 years as stated in the

memorandum of understanding. China Petroleum &

4 China LNG Industrial News

11 / 21


Chemical Corp. (Sinopec) signed contract with Alaskan

Government to jointly develop LNG industry in Alaska with

a totaled investment amount over $43 billion. China

National Petroleum Corp. (CNPC) also signed a long-term

LNG procurement contracts with Cheniere Energy, totaled

at $11 billion. China Gas Corp. also made a cooperation

memorandum with Delfin Midstream LLC to import 3

million mt LNG every year.

China National Energy Investment Group (CNEIG), 4th

Energy Giant of China, Weighs Anchor

China National Energy Investment Group (CNEIG),

consolidated from China Guodian Corporation (CGDC) and

China Shenhua Group, has officially disclosed its board and

leadership in the opening convention on November 20,

2017, presenting another super energy giant predominant

in coal industry and power generating with over 1.78

trillion CNY equity (data in 2016) weighs anchor against the

wind.

On the big opening, Gao Xuanmin, the Vice Minister of CPC

Organization Department, announced the appointments

on the leadership of the new group. Qiao Baoping,

previous President of CGDC, was nominated as the

President and the Secretary of Party Committee, and Ling

Wen, previous General Manager of China Shenhua Group,

was nominated as the General Manager and Deputy

Secretary of Party Committee.

According to data and statistics, the new group CNEIG will

be the fourth largest energy state-owned corporation of

China, only next to CNPC (4.10 trillion CNY equity) and

State Grid Corporation of China (3.56 trillion CNY equity)

and Sinopec (2.17 trillion CNY equity), and will own the

largest electricity capacity in China. As estimated, CNEIG

will hold a coal production at 480 million mt per year, a

coal sales volume at 580 million mt per year, a power

generation capacity at 226 gigawatts and coal-fired

capacity at 167 gigawatts. The annual revenue is estimated

at around 430 billion CNY, making CNEIG shown in Forbes

Along with the merge, the number of SOEs (state-owned

enterprises) under supervision of SASAC reduces to 98,

management reform and industry structure optimization

strategy. On the other hand, Beijing also pays great

attention on the first step of the new giant. On November

9, 2017, even before the formal initiation of CNEIG,

President Xi had helped the new corporation to sign a long-

term investment memorandum with the U.S. West Virginia

State with a total investment volume at $83.7 billion,

shocking the world at that time. From those above

field, CNEIG will be certain to create a promised future.

17th U.S.-China Oil & Gas Industry Forum in Ningbo, China

In order to practice the achievement of the meeting of

President Xi and President Trump last Friday and promote

the cooperation of the top two largest economic entities

in the energy field, China National Energy Administration

(NEA) united with the U.S. Department of Energy (USDE)

and U.S. Department of Commerce (USDC) to hold the 17th

U.S. - China Oil & Gas Industry Forum between November

14 to 16 in Zhejiang Ningbo. With the theme of LNG trade,

investment, industry cooperation and policy joint, over

150 experts and representatives came from the industry

and government of the U.S. and China carried out

discussion and communication and explored the new

cooperation opportunities. The deputy chief of the

National Energy Administration, Li Fanrong, and the

deputy assistant minister of USDE, Rob Smith, presented

and made a speech together at the opening ceremony.

Both sides spoke highly of the significance of the forum,

which was regarded as the fixed communication

mechanism in the U.S. - China energy filed, and deemed

that this forum would play a positive role in practicing the

achievement of the U.S. - China head meeting and

promoting the cooperation in the energy field. Aiming at

the cooperation potential of the LNG industry, common

interest and urgent problems in the cooperation, both

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sides studied them and put forward the positive

suggestions, including mechanism and regulation

innovations, establishing multilayered communication

systems, etc. The U.S. participants expressed the

aspiration to the promotion towards the cooperation in

the U.S. - China oil and gas field and emphasized that the

U.S. was equipped for guaranteeing the stabilization and

safety of the supply to the export. Besides, both sides also

exchanged ideas on the common interest.

U.S. - China Oil & Gas Industry Forum is the cooperation

and communication platform for the oil and gas markets

in the U.S. and China on the basis of China - U.S.

Environment & Energy Cooperation Proposal signed by the

heads of both sides in 1997 and is held by the U.S. and

China in turn.

China Resource Tax Reduction Enters Consultation Stage

PRC Resource Tax Law (2017 consultation draft) was

published on November 20, 2017, on the good perspective

of further reducing the operation cost in oil and gas

exploitation industry by resource tax cut.

There are four major resource tax reductions and

exemptions mentioned in the draft. First, exemption on

heating purpose oil & gas consumption in the exploitation

and oil & gas internal transportation. Second, 30%

reduction on the deep-water oil and gas exploitation. Third,

30% reduction on the exhausted mine exploitation. Fourth,

20% reduction on the refining and processing of low-grade

minerals and oil resources.

This draft is issued on the background of the emerging

energy industry of China, especially the great advance in

oil refining capacity will reach its historic highest soon by

that shocking the entire energy world. However, the

exploitation & production of oil and gas resources, despite

a moderate growth rate, is still far behand the schedule,

is increasing year by year. Therefore, Beijing shows the

determination on solving problems, and the draft is

considered as one of a bundle of treatment policies on the

way.

First LNG Container Shipped From Canada to China

recently reached a milestone with the departure of its first

shipment to China in a pilot project to determine long-

facility in Delta, logistics and equipment were provided by

True North Energy Corporation and CIMC ENRIC Holdings

Limited, and the cargo was shipped from Vancouver.

-president of

Fortis BC, we are working toward changing the LNG

landscape with the first of what could be many shipments

Transporting LNG as a containerized cargo means that

there is no need for investment in export and import LNG

terminals, according to CIMC ENRIC. In this way, LNG can

be transported by sea and by land.

Beijing is stepping up its efforts in combatting air pollution

and LNG imports have more than tripled in the last six

years. The country is in the midst of an ambitious effort to

convert millions of homes to natural gas heaters this

winter and increase the industrial use of natural gas.

However, with limited reserves of its own, the country is

13 / 21


turning to foreign producers with abundant resources to

deliver natural gas, which is the cleanest-burning of all

fossil fuels. The import volume of LNG is estimated to

reach over 45% growth rate in 2017, and by next year,

-largest

LNG importer, rubbing shoulder with Japan.

has

set December 8 as a provisional date for the start-up of the

first phase of its Yamal LNG project in the Russian Arctic.

-breaking LNG vessel, arrived at the Yamal

berth on November 7 and is waiting to load the first cargo.

The 172,600-cbm LNG carrier is the first of 15 ice-class

tankers built to ship cargoes from the Yamal LNG project.

The three-train Yamal LNG plant, designed to produce

about 16.5 million mt per year, will liquefy natural gas from

the South Tambey field on the Yamal Peninsula.

The $27 billion project is a joint venture between Novatek,

Silk Road Fund with a 9.9 percent stake.

LNG Project

China COSCO Shipping Company informed on November

12, 2017 that its subsidiary COSCO Shipping Energy

Transportation Company Limited took 50% equity stake in

four LNG vessels intended for Russia Yamal LNG Project

from Japanese shipping major Mitsui O.S.K. Lines, who has

already signed long-term charter contracts for the four

174,000 cbm LNG carriers through its wholly owned

company in June 2017.

This is the fourth joint LNG project involving MOL and

China COSCO Shipping, following one for ExxonMobil,

involving a total of four vessels which were delivered from

2015 through 2016, another for SINOPEC with six vessels

to be delivered from 2016 through 2018, and the ice-class

LNG carriers for the Yamal LNG project, with three vessels

to be delivered from 2018 through 2019. The total number

of vessels co-owned by MOL and China COSCO Shipping

will be increased to 17 in 2020 when all vessels including

those in latest project are in service.

Poly-GCL Petroleum Confirms to Invest $4 Billion on

Djibouti LNG Export Project

POLY-GCL Petroleum Group Holdings confirms that they

have signed a memorandum of understanding on Monday

with Djibouti on investing $4 billion in an LNG export

project.

The memorandum will be followed by negotiations over

concession agreements with the construction expected to

start next year allegedly, and the facility, located in

Damerjog, near the border with Somalia, will have one

liquefaction train in the first phase, allowing for the

production of 3 million mt of LNG per year, with an option

to be expanded to 10 million mt per year, according to

POLY-GCL.

14 / 21


Feed gas would be delivered via an 803 km pipeline

outi,

with a planned phase one throughput of 4 billion cbm per

year, the data shows.

Following the memorandum signing, a POLY-GCL

representative noted that the production from the first

phase is expected to start in 2020.

CEFC China Takes Stake in Rosneft Russia

During the APEC Conference in Vietnam Danang, CEFC

China and Rosneft signed the petroleum-gas refining &

chemical agreement again, and this project would settle in

Hainan Yangpu. Besides, this project aimed at building a

new petrochemical plant in Yangpu Region, Hainan, China.

This agreement will further deepen the strategic

cooperation between CEFC China and Rosneft, as this

agreement is about establishing the world-class oil

refining & petroleum natural gas joint industrial base in

China. Sources say that CEFC China and Rosneft are

planning to establish gas condensate and LPG-olefin

projects in Hainan Yangpu. Next, based on the overseas oil

refining and petrochemical production experience of

Rosneft, they will establish the technology and business

joint working team. Besides, these two enterprises will

deeply analyze and investigate the programs of chemical

industry process route and the monetization for long-term

stable feedstock supply and products.

CEFC China has established the oil product storage and

transportation base in Hainan Yangpu port. The phase I

base has been put into operation, and the storage capacity

of this base is about 2.8 million m3, which is the biggest

petroleum reserve warehouse in Hainan, resulting in the

feedstock support to the future petroleum project.

Meanwhile, CEFC China owns the overseas oil gas rights

about 60,000kt/a which are over 15 years. Besides, CEFC

China owns long-term stable petroleum supply from Abu

Dhabi, Chad, Kazakhstan, etc. As well as there is no

feedstock reserve pressure for the refining and chemical

project, CEFC China intends to develop the fine chemical

products. Meanwhile, based on power generation, fine

chemical, intelligent power and new energy technology,

CEFC China will establish the future energy industry chain,

obtain more LNG resources, construct advanced fine

chemical production processing base and take up the

commanding height of the new leading industry.

This chemical base is regarded as the great development

of CEFC China in the future LNG, fine chemical and energy

industry chain.

CNOOC Fujian Zhangzhou LNG Terminal to Break Ground

On November 11, 2017, NDRC officially & approved the

proposal of Fujian Zhangzhou LNG Terminal Project in

written form (FGNY[2017]1951), presenting that the

second terminal in Fujian Province enters the construction

phase.

On November 21, 2017, the project construction broke

ground at the site, and the construction will be

accomplished and delivered by 2020 as estimated.

Fujian Zhangzhou LNG Terminal, located at Xingu Gulf,

Longhai City, is planned to build three 160,000 cbm storage

tankers and one berth and matching facility to provide

80,000-270,000 cbm receiving capacity (also compatible

with 30,000-80,000 cbm domestic transferring vessels).

The designed receiving capacity of the Phase I reaches 3

million mt per year, and the investment totals around 7.11

billion CNY. The construction is jointly contracted to

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