Sinopec's first LNG project starts in Qingdao

After PetroChina's first Dalian LNG (liquefied natural gas) project was completed, Sinopec's first LNG project, the Qingdao LNG Project, officially started on the 10th.

Sinopec said that after the project is completed and put into operation, the natural gas supply in the Shandong market will form a double air source protection for both sea and land, which will ease the tight supply of natural gas in the Shandong Peninsula and the entire Shandong Province.

It is understood that the total investment of the first phase of the project is 9.66 billion yuan. It is expected that all construction work will be completed in September 2013 and will be put into operation in November 2013. Project resources come from ExxonMobil’s LNG project in Papua New Guinea, and Sinopec has signed a long-term purchase and sale agreement with ExxonMobil with a 2 million-ton LNG/year contract. However, yesterday, Sinopec has not disclosed the pricing of natural gas projects.

Due to the rapid development of the domestic natural gas market, domestic natural gas production has been unable to meet the supply, and domestic oil companies have started construction of liquefied natural gas receiving station projects to receive liquefied natural gas from overseas to meet the needs of the domestic market.

At present, Sinopec's natural gas production accounts for only about 10% of the country's total. However, due to the rising trend in natural gas prices and the fact that the domestic market is in short supply, Sinopec is accelerating the development of natural gas. Sinopec said yesterday that by the end of this year, petrochemical natural gas pipeline network mileage will reach 6,500 kilometers, natural gas production will exceed 10 billion cubic meters, the market scope involves more than 20 provinces, municipalities and autonomous regions throughout the country.