[Haichuan Chemical Salary News] ExxonMobil and Zhejiang Energy Group sign a 20-year framework agreement for the supply and purchase of liquefied natural gas
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ExxonMobil and Zhejiang Energy Group have signed a framework agreement for the supply and purchase of liquefied natural gas. Zhejiang Energy Group will receive one million tons of LNG each year for 20 consecutive years; the long-term supply is expected to begin in the early 2020s, underscoring ExxonMobil’s commitment to helping China meet its rapidly growing demand for natural gas. Shaoxing, Zhejiang — On September 18, ExxonMobil announced that it had signed such a framework agreement with Zhejiang Energy Group. Following the conclusion of the subsequent sales agreement, over the next 20 years starting from the early 2020s, Zhejiang Energy Group will receive one million tons of LNG per year. The 2018 World Oil Traders Conference was held in Zhoushan City, Zhejiang Province. The agreement was signed during the current World Oil Traders Conference. “This agreement represents an important milestone in the establishment of our strategic partnership with Zhejiang Energy Group,” said Peter Clarke, President of ExxonMobil’s Natural Gas and Power Marketing Company. “As China moves toward a future based on clean energy, natural gas will play a crucial role, and ExxonMobil’s nearly 50 years of expertise in the LNG sector will contribute to this transition. ” Since the late 1970s, ExxonMobil has gradually re-engaged in various areas of China’s energy sector. ExxonMobil has a long-term commitment to China, striving to help meet the country’s growing energy needs through its products, technologies, as well as partnerships and investments in China. Source: ExxonMobil
Is all the natural gas in Zhejiang from ExxonMobil?
It seems that Zhoushan has just put into operation a natural gas receiving station, operated by that private company from Hebei
The Xin’ao Zhoushan LNG receiving station project is the first large-scale LNG receiving and refueling facility in China to be wholly owned by a private enterprise. It is also the first large-scale LNG receiving station project approved by the Energy Bureau to be invested in by a private company. Located on the north coast of Zhoushan Island, in the core area of the Zhejiang Free Trade Zone, this facility was invested in and built by SNOW Group. It integrates various functions such as LNG unloading and storage, gas-liquid transmission, distribution and transfer, ship refueling, and emergency peak shaving; among these, the ship refueling capability is the first of its kind at a receiving station in China. LNG receiving station projects require huge investments and involve complex approval processes; to date, only private enterprises such as SNOW Group, JiuFeng Group, and Guanghui Energy have ventured into this field. The Xinoao Zhoushan LNG receiving station is the largest, with the capacity to receive large ocean-going LNG carriers. The first phase of this project, once completed, will be capable of processing 3 million tons of liquefied natural gas per year. The facility includes two LNG storage tanks with a capacity of 160,000 cubic meters each, a unloading dock that can accommodate LNG ships with a capacity of 80,000 to 266,000 cubic meters, a multi-functional dock (featuring two LNG loading berths as well as the capability for unloading operations), and a roll-on/roll-off dock (with two berths capable of accommodating 30 roll-on/roll-off ships). Additionally, the facility is equipped with 14 truck loading units, IFV gasification systems, high-pressure transmission systems, and other supporting processes and auxiliary facilities for generating power from cold energy. The second-phase expansion project of the Zhoushan receiving station is expected to be completed in 2021, with an annual processing capacity of 5 million tons, which could rise to 10 million tons in the long term. The New Aoshan LNG receiving station project has been designated as a key project during the 13th Five-Year Plan period by Zhejiang Province. It serves as an important source of gas supply for Zhejiang and even the East China region in order to implement the State Council’s Three-Year Action Plan for Combating Air Pollution and ensuring emergency supply needs. It is reported that the LNG unloaded at this receiving station will mainly be sold to downstream markets in the East China region.
The flow of U.S. LNG to China is accelerating. During the winter of 2017, there was a shortage of natural gas in North China, and the market hoped to alleviate this shortage by importing cheap U.S. shale oil and gas. It is understood that in January, the price of U.S. natural gas futures peaked at around 3.66 dollars per million British thermal units (about 0.75 yuan per cubic meter), while the highest price in North China in that period exceeded 10 yuan per cubic meter. Therefore, market analysts believe that China should rapidly import U.S. natural gas. “However, importing U.S. natural gas is not easy, and its price is high in the long term. ”As explained by the aforementioned expert on the Shanghai natural gas market. According to him, many American natural gas companies need to enter into long-term supply contracts, with prices ranging from April to October each year being comparable to those of Chinese LNG, which is the off-season for natural gas consumption in China ； Only in winter does natural gas in the United States generate huge profits; “that’s why many Chinese experts who went to the U.S. stopped speaking after returning, as no companies are willing to bear the potential losses during the off-season in order to reap profits from winter natural gas.” ” Furthermore, the various states in western North America **do not agree to the construction of new LNG export terminals**, so many natural gas companies are forced to export LNG through terminals in the east; as a result, LNG exports currently take place mainly through the eastern United States ； “If shipping from the eastern port to China, the delivery time will be 7 to 15 days longer than that from the western port. ”As explained by the aforementioned expert on the Shanghai natural gas market. Therefore, he believes that state-owned oil companies can cooperate with multinational oil and gas firms as well as U.S. shale gas companies to sign long-term supply contracts, using the gas supplied under these contracts as a basis for China’s natural gas needs. \"State-owned oil companies have strong financial resources, but private enterprises find it difficult to cope with such demands.\" ” In early February, CNPC signed its first long-term contract with Cheniere Energy of Texas, United States, for the supply of American liquefied natural gas (LNG) to China. Cheniere Energy agreed to sell up to 1.2 million tons of liquefied natural gas to CNPC each year; some of these deliveries will begin this year, while others will start in 2023 and continue until 2043.
The global resource optimization strategy of multinational corporations. A number of Chinese companies such as CNPC and Sinopec are following this path, establishing operations around the world to acquire resources.
At the end of May 2016, ENN Group and Zhejiang Rongsheng Holding Group signed a strategic cooperation agreement in Hangzhou, linking ENN’s LNG receiving station in Zhoushan with a capacity of tens of millions of tons to Rongsheng’s green petrochemical complex in Zhoushan, which has an annual capacity of 40 million tons; this latter facility is likely to become the largest buyer of LNG resources supplied by ENN in Zhoushan. The refining and chemical integration project at the Zhoushan Green Petrochemical Base is a key project under Zhejiang’s 13th Five-Year Plan, built on Yushan Island in Zhoushan by Rongsheng Holding Group, Zhejiang Juhua Group Company, Zhejiang Tongkun Holding Group Co., Ltd., and Zhoushan Marine Comprehensive Development Investment Co., Ltd. In 2015, these four companies jointly established Zhejiang Petrochemical Co., Ltd., with plans to invest in what is said to be China’s first private green petrochemical project. The total capacity of this project is 40 million tons per year for oil refining (including 10.4 million tons per year for aromatics), and 2.8 million tons per year for ethylene. The project will be carried out in two phases. Phase 1 is scheduled to be completed and put into operation by the end of 2018, with an estimated natural gas demand of 600,000 tons per year; Phase 2 is expected to be completed and put into operation by the end of 2020, resulting in a total annual natural gas demand of 1.2 million tons. The Xin’ao Zhoushan LNG project is located in the Xingang Industrial Park of the Zhoushan Economic Development Zone. It received approval from the **Energy Bureau in March 2013, and was officially approved by the same bureau at the beginning of 2015; it is the first imported LNG receiving station project funded by a private enterprise. The project is planned to be implemented in three phases, with a total investment of over 10 billion yuan. The total investment for Phase 1 is 5.85 billion yuan, with a designed annual LNG processing capacity of 3 million tons; commissioning is scheduled for June 2018. Phase 2 will have a capacity of 5 million tons per year, with completion and operation planned for 2020. In the long term, the capacity is intended to be expanded to 10 million tons per year. SNOW has entered into long-term gas supply agreements with multinational giants including Total, and acquired a stake in the Australian upstream oil and gas producer Santos. New Ocean and Rongsheng are both privately-owned listed companies, and the Zhoushan Green Petrochemical Base project as well as the Zhoushan LNG project are both key projects in Zhejiang Province. As Li Shuirong of Rongsheng Holding Group said, SNOW and Rongsheng are both leaders among private enterprises; they share similar characteristics and aspirations, and have both benefited from the advantages brought about by the reform and opening-up policy. (Source: China Energy Observer)