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China's LNG downstream market competition intensified

source:China Energy Network     views:28     datetime:2016-01-01

The current global commodity performance is very sluggish, China's industrial manufacturing, trade enterprises performance is also sluggish. Affected by the expected decline in real estate, steel, cement, building materials and other industries fell significantly, and even rumors of bankruptcy rush. But the Chinese natural gas industry has been alone show, in recent years out of a "high" up the curve, which is relatively flexible price of the LNG industry is usher in the investment boom.

As China's haze weather is serious, the current government's basic attitude towards energy consumption is "coal reduction, gas, oil control", natural gas access to policy support. In the past five years, the supply of natural gas has tripled, and China's LNG supply has expanded rapidly. Production in the receiving station to reduce the proportion of supply, the factory accounted for an increase. In 2006 the factory supply accounted for 66%, receiving stations accounted for 34%. According to statistics, as of early August 2014, China's total supply capacity of LNG increased by 15.3 million square / day to 53.65 million square / day, compared with the end of 2013 increased by 39.7%. In the construction state, plans to put into operation in 2014, more than 50 LNG projects, total total capacity of more than 60 million square / day.

Domestic LNG industry has developed rapidly, has become the economic hot spots, and formed a state-owned, private and foreign enterprises to participate in the increasingly competitive market, 'crowded' market structure. At the same time, China's natural gas sources are diversified, especially coal / coke oven gas methane, shale gas, coalbed methane and other unconventional natural gas development. These gas sources are relatively small and scattered, pipeline transportation is not economical, LNG project scale is flexible, can effectively solve the problem of product transportation. In addition, the demand for pipe spikes, the rise of automotive LNG and the state to encourage the development of natural gas distributed energy, will also drive the development of small and medium-sized LNG projects.

However, the development of small and medium-sized LNG industry is also facing challenges. First of all, the current domestic investment LNG plant gas supply more than 70% from the oil, gas shortage has become the LNG downstream market development of the biggest constraints. Second, with the advancement of natural gas prices, raw material prices will affect the project economy. Once again, LNG plant unit investment is high, need to ensure safety and reliability and ease of operation under the premise of optimizing the design and try to control investment costs to reduce the cost of liquefaction, improve competitiveness. In addition, the factors that ensure the success of the LNG project include location and layout, scale of production, and process technology. At present, the limited gas supply, price and competition intensified, many LNG plant installations are partially discontinued, or even all stagnant. Domestic LNG downstream market reshuffle is imperative.