Shell, PipeChina pen LNG terminal use deal

LNG giant Shell became the first international energy firm to sign a terminal use agreement with state-owned China Oil and Gas Pipeline Network (PipeChina).

Units of Shell and PipeChina signed two LNG terminal use agreements on February 22.

In addition, Shell Energy (China) and PipeChina LNG Terminal Management penned a memorandum of cooperation as well, according to a statement by the latter.

The LNG terminal deals mark an important step in opening up of PipeChina’s LNG terminals for third party access, PipeChina LNG Terminal Management said.

The terminal use deals include Yuedong LNG and Beihai LNG facilities for 2022, it said.

As per the memorandum, the two firms would collaborate on long-term use of PipeChina’s LNG receiving terminals, PipeChina LNG Terminal Management said.

Ten LNG import terminals

China launched PipeChina in December 2019 to acquire pipelines and LNG import terminals from the country’s state-owned energy giants.

PipeChina LNG Terminal Management was established about a year later and currently operates seven LNG receiving terminals, the statement said.

This accounts for about one-third of China’s total LNG receiving capacity, it said.

Also, the firm is building three new LNG terminals in Shandong, Fujian, and Shenzhen.

Rising LNG imports

China’s LNG imports reached 78.93 million tonnes in 2021, hitting a new record high due to rising demand from the power generation and industrial sectors.

With this, China officially became the world’s largest LNG importer, overtaking Japan.

Last year, Shell signed a ten-year deal with QatarEnergy to receive LNG supplies from Qatar to China.

Under the SPA, QatarEnergy will supply 1 million tons per year of LNG to various import terminals in China, starting in January 2022.

Besides this deal, Shell also signed the world’s first term contract for carbon-neutral LNG with a unit of PetroChina.

Shell expects Chinese LNG imports to nearly double by 2040.

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