CNOOC's Shenzhen 4 Million-Ton-Per-Year LNG Terminal Project Receives Approval

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Researched by Industrial Info Resources (Sugar Land, Texas)--The National Development and Reform Commission (NDRC) approved China National Offshore Oil Corporation's (CNOOC) (Beijing) Shenzhen liquefied natural gas (LNG) terminal project (Diefu Site) in June 2012, according to an announcement from NDRC on July 30.

CNOOC Shenzhen LNG terminal project (Diefu Site) is located at Diefu in the west bank of Dapeng Peninsula, in eastern Shenzhen. According to the approval of the NDRC, the project will have the capacity to handle 4 million metric tons per year of LNG by constructing four large-scale LNG storage tanks, each with 160,000 cubic meters; associated gasification facilities; a special berth capable of receiving LNG boats sized at 80,000 to 266,000 cubic meters; and water intake and draining works for the LNG terminal. The project will be invested jointly by CNOOC Gas and Electricity Group Company Limited (Zhuhai, Guangdong) (70%) and Shenzhen Energy Group Company Limited (Shenzhou, Guangdong) (30%). Total investment in the project will be about $1.24 billion.

According to plans, the project will be put into operation in 2015 and reach designed capacity in 2019.

As one of the top three oil producers in China, CNOOC was once the dominant player in the natural gas market of East China and South China regions. However, following the commissioning of the second west-to-east natural gas transmission pipeline, CNOOC gradually lost the advantage in the competition with rival, China National Petroleum Corporation (Beijing), as the price of imported LNG is about one-third higher than the natural gas imported from the Middle Asia. With the approval of the project, plus the existing LNG project in Dapeng Bay, Shenzhen City, and another proposed LNG terminal in Jieyang, CNOOC will be able to supply about 8 million to 10 million tons per year of LNG to the Guangdong market by 2015, which might help CNOOC to regain the leading position in the Guangdong market.

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