November 29, 2011 / 10:30 AM / 9 years ago

UPDATE 1-CNOOC plans China's 1st floating LNG storage

* CNOOC plans several more floating facilities along coast

* Growing competition in building onshore receiving terminals

* Tianjin facility eyes imported LNG (Adds details)

By Chen Aizhu and Jim Bai

BEIJING, Nov 29 (Reuters) - China National Offshore Oil Corp (CNOOC Group) will build the country’s first floating liquefied natural gas (LNG) receiving and storage facility off the northern city of Tianjin, state media and industry officials said.

The project, costing 5.7 billion yuan ($892.84 million), would be able receive 2.2 million tonnes of the fuel annually and all the LNG will be imported, a CNOOC official said.

China has been adding onshore receiving terminals along its east coast to handle imports of LNG, super-chilled natural gas shipped by tankers, to meet surging domestic demand for the cleaner-burning fuel.

But with competition rising among the main investors — CNOOC, PetroChina and Sinopec Corp — and limited land sites along the coast, companies have shifted to floating facilities.

“It’s all because of increasing difficulties in winning state approval for a land-based receiving terminal,” said the CNOOC official.

CNOOC and its partners will either buy or rent a floating facility for the Tianjin project, which should start operation in 2014, said the official, adding that CNOOC has plans to add several more floating facilities along the coastline.

REGASIFICATION

From there, smaller tankers will ship the fuel to an existing onshore receiving terminal for regasification before being pumped into the city gas grids or being trucked away by the country’s growing fleet of LNG trucks that supply residential areas and small power stations.

CNOOC plans to team up with the Tianjin port authority and the Tianjin city gas company to extend the project into a second phase — to build a 6 million tonne-per-year onshore LNG receiving terminal and four storage tanks with capacity of 160,000 cubic metres each, official news agency Xinhua said on Tuesday.

The companies have set a target to bring these on line in 2015, it said.

China’s LNG imports, which now make up roughly a tenth of its total gas use, rose by a quarter in the first 10 months of this year from a year earlier to 9.4 million tonnes, customs data showed.

CNOOC, the country’s leading LNG terminal developer, has three receiving terminals operating in southern China.

CNOOC is the parent of Hong Kong-listed offshore oil producer CNOOC Ltd. ($1=6.3841 yuan) (Reporting by Jim Bai and Chen Aizhu)

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