SunSirs: Energy, Review of Ten LNG Events in 2019

Introduction: 2019 is about to pass, and LNG industry has experienced ups and downs this year. Looking back to 2019, a lot of major events happened in LNG industry, such as the establishment of the state pipe network company and the ventilation of LNG pipeline (North Section) of the East China Russia line, which had a significant impact on the industry. Let's review the major events in 2019.

1. China's first self-operated deepwater gas field started construction

According to the news on January 10, 2019, the semi-submersible production platform of Lingshui 17-2 gas field development project, China's first self-operated deep-water gas field has recently started construction at the Qingdao manufacturing site of offshore oil engineering. The gas field is expected to be put into production at the end of the Fifth Plenary Session of the 13th CPC Central Committee as soon as possible, with an annual output of 3 billion to 3.5 billion m³ of natural gas. This will effectively promote the development of deep-water oil and gas resources in the South China Sea, and is of great significance to the construction of the South China Sea atmospheric area and the protection of China's energy security.

2. Circular of the development and Reform Commission on adjusting the price of LNG benchmark stations

According to the information of the national development and Reform Commission on March 29, 2019, the national development and Reform Commission issued the notice on adjusting the price of LNG benchmark stations of each province (District, city) from April 1, 2019, with a minimum of 1,030 RMB/ thousand m³ (including 9% value-added tax). The combination of residential and non-residential LNG prices does not only mean the price increase, which is also the way to reform the natural gas price in China, to ensure the healthy and orderly development of the natural gas market in China.

3. ExxonMobil signs a 20-year supply agreement with China

According to CNN report on April 23, ExxonMobil, the world's largest non-governmental oil and gas producer, announced that it had signed a 20-year LNG supply agreement with China's Zhejiang Energy Group, with a contract volume of 1 million tons/year. As the world's largest non-governmental oil and gas producer, ExxonMobil is the industry leader in many aspects of energy and petrochemical industry. The re-entry of US natural gas into the Chinese market will undoubtedly squeeze Australia's share in the Chinese LNG market. Combined with Australia's attitude towards Huawei issues or international decision-making, China's purchase of US natural gas has more advantages than disadvantages in general.

4. Major changes in LNG pricing

The State Development and Reform Commission, the State Energy Administration and other two departments have formulated the supervision measures for the fair opening of oil and gas pipeline network facilities, which was implemented on May 24, 2019. It is pointed out that after the opening of oil and gas pipeline network facilities, the calorific value quality of mixed transmission natural gas is different. Energy measurement can ensure the accuracy of natural gas trade measurement to the greatest extent, reduce measurement trade disputes, and protect the economic and social benefits of enterprises.

5. Increasing the exploration and development of oil and gas in China to ensure the national energy security

On July 8, 2019, PetroChina and Sinopec signed a joint research framework agreement on Tarim Basin, Junggar Basin and Sichuan Basin, involving 81 exploration rights and a total area of about 305,800 square kilometers. On July 10, Sinopec and CNOOC (China) Co., Ltd., a subsidiary of CNOOC, signed a cooperation framework agreement on Bohai Bay, Beibu Bay, South Yellow Sea and Subei basin, involving 19 exploration rights of both sides and a total area of 26,900 square kilometers. CNPC, Sinopec and CNOOC signed agreements with each other, join hands with China's oil and gas exploration, and allowed foreign investment to enter China's oil and gas exploration, which was conducive to promoting China's oil and gas opening cooperation, increasing oil and gas exploration and development efforts, improving oil and gas exploration and development technology, and ensuring national energy security.

6. The attack on Saudi oil fields has reduced the supply of LNG by about 2 billion m³

According to foreign media reports, on September 14, 2019, Beijing time, Saudi Aramco was attacked by drones, resulting in a sharp reduction of 5.7 million barrels of special oil per day, close to 6% of the global oil production. Saudi energy minister said on September 15, 2019 that the explosion of facilities on September 14 also reduced Saudi Arabia's natural gas supply by about 2 billion m³, resulting in Saudi Arabia's supply of ethane and liquefied natural gas It will shrink by 50%. But he said domestic supplies of fuel and water and electricity were not affected.

7. Discovery of hundred billion cubic meters gas field in Tarim Oilfield

On October 3, 2019, the well test of Bozi 9 of Tarim Oilfield Company of PetroChina was successful, with high-yield industrial oil and gas flow, 418,200 m³of natural gas and 115.15 m³of condensate per day. It has become another one hundred billion cubic meters gas field found in the south of Tianshan in one year, marking the substantial progress of the construction of the second trillion cubic meters atmospheric area in Tarim Oilfield.

8. Crazy! LNG prices soared 23.7% in a single day

On October 30, 2019, the starting base price of Northwest raw gas auction was raised to 1.57 RMB/ m3, and the final transaction price was 2.6-2.75 RMB/ m3. The volume of registered orders in the auction was 100 million cubic meters, 80 million cubic meters less than the last time. According to the data monitoring of SunSirs, the average price of LNG on October 30 was 3,840 RMB/ ton, and the average price on October 31 was 4,750 RMB/ ton, up nearly 1,000 RMB per day, up 23.7%.

9. China Russia east gas pipeline (North Section) officially put into operation for ventilation

On December 2, 2019, the LNG pipeline (North Section) of the China Russia east line was officially put into operation for ventilation. The natural gas pipeline of the China Russia east line will be interconnected with the existing regional gas transmission pipeline network, which can stably supply 38 billion m³of clean and high-quality natural gas resources to the northeast, Bohai rim and Yangtze River Delta every year, effectively improving and alleviating the air pollution along the line. After the official acceptance of Russian gas, Northeast China and Beijing Tianjin Hebei region will benefit directly.

10. Establishment of national pipe network company

On December 9, 2019, National Oil and Gas Pipeline Network Group Co., Ltd. (hereinafter referred to as "National Pipeline Network Company") was established. The National Pipeline Network Company will build a "one network for the whole country" to realize the interconnection of long-distance oil and gas pipelines, better guarantee the national energy security, and promote the high-quality development of the oil and gas industry, which is a key step in deepening the reform of the oil and gas system in China. It can better guarantee the national energy security, promote the high-quality development of the oil and gas industry and meet the people's needs for a better life.

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