Kunlun Energy Co., a gas supplier controlled by PetroChina Co., said it aims to deliver 15 million metric tons of liquefied natural gas a year to the Chinese market by 2015, making it the nation’s biggest LNG supplier.
“This target is very conservative, and may very likely be exceeded,” Deputy General Manager Zhong Wenxu said after an industry conference in Beijing today. He said 9 million tons of the LNG will come from Kunlun Energy’s gas liquefaction plants in China each year and 6 million tons will be from fuel imports arriving at PetroChina’s LNG terminals.
Kunlun Energy, whose gas distribution business accounted for 15 percent of its profit last year, is expanding its pipeline network and acquiring assets from its parent to benefit from rising domestic demand for the fuel. Last year, Kunlun Energy agreed to acquire stakes in PetroChina’s Dalian and Jiangsu LNG terminals and pay 18.9 billion yuan ($2.9 billion) for a share in its parent’s pipeline operating unit in Beijing.
The company, formerly known as CNPC Hong Kong Ltd., plans to purchase more LNG terminals from PetroChina, Zhong said, without giving more details. Kunlun Energy also plans to build more plants near PetroChina’s gas fields in western China to liquefy the fuel for delivery to users by truck, he said.
Kunlun Energy is one of PetroChina’s major platforms for natural gas, Mao Zefeng, the Beijing-based spokesman of China’s biggest energy producer, said on June 17. PetroChina’s plan to inject gas assets into its subsidiary is proceeding “smoothly,” Mao said.
Kunlun Energy is also the operator and developer of nine oilfields in China, Kazakhstan, Thailand, Peru, Oman, Indonesia and Azerbaijan. Gas has become “the major growing business of the company in the future,” the company said in its 2010 earnings statement in March.
Shares of Kunlun Energy have risen 36 percent in Hong Kong trading in the past year, beating the 9 percent gain in the benchmark Hang Seng Index. (HSI) The stock climbed 0.9 percent to close at HK$13.36. PetroChina fell 0.5 percent to HK$11.24.
PetroChina is due to start operating its 3.5 million ton-a- year Rudong terminal in Jiangsu province by this month or in early July, Liu Wenfei, a director at the port, said on May 25.
The company is currently building the 3 million ton-a-year Dalian LNG terminal in Liaoning province and a 3.5 million ton- a-year Tangshan port in Hebei province. PetroChina received approval from the National Development and Reform Commission to construct an LNG terminal in Shenzhen, the NDRC said in 2009.
China National Offshore Oil Corp. is already operating three terminals on the nation’s east and south coasts.
The country may have 16 terminals for receiving LNG shipments by 2015, with a combined capacity of more than 44 million tons, Song Shaoguang, vice general manager of China Huanqiu Contracting & Engineering Corp., a unit of China National Petroleum Corp, said at the LNG conference in Beijing.
LNG is natural gas chilled to liquid form, reducing it to one-six-hundredth of its original volume for shipment by tankers to destinations not connected by pipeline.
To contact the reporter on this story: Ying Wang in Beijing at email@example.com
To contact the editor responsible for this story: Amit Prakash at firstname.lastname@example.org.