Shandong Province encourages the construction of LNG and CNG gas supply stations

Thread Content

Since 2015, driven by the significant price advantage of LNG, the construction of LNG regasification stations in Shandong Province has seen rapid development, but some of these stations were built without the necessary permits. Recently, the Ministry of Housing and Urban-Rural Development issued a document encouraging LNG and CNG gas supply stations to be used as a transitional approach to increase the prevalence of pipeline gas, thereby strengthening policy support for the development of LNG gas supply stations in Shandong Province. On May 23, the Department of Housing and Urban-Rural Development of Shandong Province issued the \"Implementation Plan for Implementing the Provincial Guidelines on Accelerating the Clean and Efficient Use of Coal.\" The Plan proposes that by 2020, the coverage rate of centralized heating in cities and county towns should reach 70%, while the coverage rate of piped gas should reach 80% ； By 2017, the proportion of towns with centralized heating or decentralized clean energy heating should reach 50%, while the penetration rate of piped gas should reach 65% ； In 2020, efforts were made to extend urban gas pipelines and central heating networks to smaller towns. The Plan requires accelerating the implementation of the \"Urban Heating\" and \"Gasification of Shandong\" projects, strengthening the construction of heating facilities, and expanding centralized heating networks to rural-urban fringe areas and small towns ； Promote the extension of urban gas main pipelines to rural-urban fringe areas and small towns, encourage the use of LNG and CNG supply stations as transitional solutions, establish and improve natural gas reserve and peak-shaving stations, create a gas distribution system that covers both urban and rural areas, and accelerate the achievement of gas access in every town across the province. Since 2015, LNG prices have had a significant price advantage over those of pipeline-based industrial gas, which has led to rapid development in the construction of LNG regasification stations. In 2015, according to Zhuochuang Information, the consumption of LNG for industrial use in Shandong Province reached 460,000 tons, accounting for 46% of the total LNG consumption in that province. However, as LNG encroached on the market for pipeline gas, in 2016 construction of LNG regasification stations was restricted in some areas. Moreover, urban gas companies across various regions offered price discounts to large industrial users, ranging from 0.3 to 0.6 yuan per cubic meter, based on the pricing set by the price regulation authorities, in order to counter the impact of LNG on demand for pipeline gas. Therefore, the growth rate of industrial LNG demand in Shandong Province in 2016 was limited. The Department of Housing and Urban-Rural Development issued an \"Implementation Plan for Implementing the Provincial ** Guidelines on Accelerating the Clean and Efficient Use of Coal\", encouraging LNG and CNG supply stations to be used as a transitional approach to increase the prevalence of piped gas; as a result, greater policy support is being provided for the development of LNG supply stations in Shandong Province.