China's LNG Prices Highest Since 2011 as Winter Demand Soars - Dealers
BEIJING, Nov 27 (Reuters) - China's domestic prices for liquefied natural gas (LNG) on Monday topped 7,000 yuan ($1,061) a tonne, highest since at least 2011, as demand soared with millions of homes burning gas for the winter instead of coal.
Wholesale LNG prices have gained more than half their value from mid-November, meaning the jump in prices has come less than two weeks into northern China's heating season.
Two LNG dealers in the northern province of Hebei said the price could possibly be a record high as China's LNG market is much less developed than other commodities, with significant imports of the fuel appearing only over the last five years.
"There are too many customers chasing too few supplies," said Qu Xiuzhi, a manager with privately-run Xinkun Gas.
Xinkun Gas hauls the liquid fuel in hulking trailers to steel mills and porcelain makers in Tangshan, China's steel capital east of Beijing.
China's state-owned oil firms are maximising production at domestic gas fields and boosting LNG imports at receiving terminals, although that has not kept the surge in demand from Beijing's aggressive gas push from outpacing supply.
"It's a huge challenge for us to secure every extra truckload of LNG," said Li Ruipeng, a manager with a separate Tangshan-based dealer Huapu Gas.
Li said more than 20 percent of his company's tanker truck fleet of more than 60 are idle because supplies from both import terminals and inland gas liquefaction plants are falling short.
That has forced both Xinkun Gas and Huapu Gas to cut back or suspend fuel deliveries to some of their clients, such as filling stations for compressed natural gas and steel mills.
Import terminals run by China National Offshore Oil Company (CNOOC) and PetroChina are quoting ex-terminal prices much lower at 4,700 to 6,040 yuan a tonne, but dealers are asking around 7,000 yuan, according to Qu and Li.
LNG plants in Inner Mongolia, Shaanxi, Shanxi, Hebei and Shandong were pegging wholesale prices on Monday at 6,950 to 7,050 yuan a tonne, according to an LNG price monitoring agency based in east China's Jiangsu.
($1 = 6.5977 Chinese yuan) (Reporting by Chen Aizhu; Editing by Tom Hogue)
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.