Guangdong Energy Group emerged as a first-time spot buyer of liquefied natural gas (LNG), as the Chinese utility secured access to a receiving terminal in southern China, a company executive and three trading sources said this week.
The state-run utility bought two cargoes of the super-chilled fuel totalling 120,000 tonnes, both from Malaysian state oil and gas producer Petronas, the sources said.
The utility for the first time exercised a right to use the Guangdong Dapeng LNG terminal in Shenzhen operated by China National Offshore Oil Company, or CNOOC.
Guangdong Energy is a minority investor in the receiving facility that started operation in 2006.
“As an investor in the receiving terminal and also a large end-user, we normally secure gas from CNOOC, but this year we’ll have the right to bring in five cargoes of our own purchases,” said a Guangdong Energy executive.
The official asked not to be named as he’s not authorized to speak to the press. A Guangdong Energy spokeswoman did not immediately respond to a request for comment.
Guangdong Energy’s purchases came amid tepid spot buying by China’s dominant state energy giants as they absorbed earlier contracted long-term supplies and as a flood of spot volumes drove Asian prices to seven-week lows.
Petronas spokespersons could not be reached by phone.
LNG imports into China – the world’s second-largest buyer after Japan since 2017 – are dominated by state players CNOOC, PetroChina and Sinopec, which build most of China’s receiving terminals and import globally from exporters such as Qatar, Australia and Russia.
Beijing wants to liberalise the market by encouraging state firms to open terminals to independent companies, but access has so far been rare and costly for smaller players.
That’s because the state importers often want to prioritise their own supplies secured under long-term agreements and sought high prices from independent importers for the use of their infrastructures, according to traders and industry officials.
The Guangdong firm secured its first spot cargo that was delivered last week, at $4.30 per million British thermal unit (mmBtu), for delivery on an ex-ship basis, said three traders with knowledge of the deals.
The Guangdong Energy executive confirmed the details.
A second cargo for delivery in July was done at about $5.20 per mmBtu, the traders said. The group, a joint venture between Guangdong provincial government and state utility Huaneng Group, operates 32 gigawatts of mostly coal-powered generating capacity, according to the company website. About 8 percent of its total capacity is fuelled by natural gas, the website says.
Sea News, May 30