CNOOC, China’s biggest operator of LNG import terminals, is under discussions with independent companies about access to its facilities after short trial leases last year, Reuters reports. CNOOC is offering pipeline developers such as ENN Energy and LNG distributors such as Longkou Shengtong Energy the chance to use its LNG terminals on China’s east coast over a 10-year period, with a specified number of slots each year.
Specifically, the initiative was launched in early 2018, when Beijing was planning to form a national pipeline company, a combination of state energy companies, in a reform of the sector that’s intended to spur private investment and boost use of cleaner-burning natural gas.
CNOOC could profit tens of millions of dollars a year in relatively risk-free revenue.
Due to terminal access, CNOOC asked companies to offtake some of its import cargoes signed under term agreements with global suppliers, as reported by Reuters.
Up to now, CNOOC hasn’t responded to any comments concerning this issue.
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CNOOC sold two five-day terminal slots in late 2018 via open tenders, gaining a profit of 63 million yuan ($9.39 million) out of the sales.
One of the deals was with Shengtong, a private firm, who partnered with state-owned Zhenhua Oil. Whereas, the second deal was conducted by private LNG distributor Zhejiang Panergy.
As the sales were increasing, CNOOC was encouraged to broaden the openings.
Private firms, however, remained alert.
If CNOOC ties pipeline access to its term cargoes, which tend to be more pricey than the spot market, CNOOC’s initiative could be a hard sell, said a second official with knowledge of CNOOC’s plan.
