Two more Chinese energy companies have joined the procurement team of Arctic LNG 2 project.
On January 11, Enn Natural Gas Co.Ltd(600803) ( Enn Natural Gas Co.Ltd(600803) , 600803. SH) announced that its subsidiary ENN LNG (Singapore) Co., Ltd. and Novatec Natural Gas Power Asia Co., Ltd., a subsidiary of Novatec (hereinafter referred to as Novatec), signed a long-term purchase and sales agreement on liquefied natural gas (LNG) resources.
Novatech will supply about 600000 tons of LNG to Enn Natural Gas Co.Ltd(600803) every year for 11 years by means of onshore delivery. The LNG in the agreement is produced from the Arctic LNG 2 project.
On the same day, Zhejiang energy and Natural Gas Group Co., Ltd., a subsidiary of Zhejiang energy group, also announced that it had signed a long-term purchase and sales agreement with novatech Asia natural gas power Co., Ltd., which agreed to supply up to 1 million tons of LNG per year for a period of 15 years. The purchased gas source is also from the Arctic LNG 2 project.
Therefore, it is planned that the maximum LNG supply involved in the agreement signed between novatech and two Chinese enterprises will reach 21.6 million tons.
Enn Natural Gas Co.Ltd(600803) is one of the five major urban gas enterprises in China. It operates more than 230 urban gas projects nationwide, with an annual LNG distribution capacity of more than 10 billion cubic meters, and operates Zhoushan LNG terminal, China’s first large private LNG terminal.
Zheng Hongzhen, President of Enn Natural Gas Co.Ltd(600803) , said that the above agreement will further enrich Enn Natural Gas Co.Ltd(600803) LNG resource sources, improve its natural gas supply capacity and meet the demand of China’s natural gas market.
Zhejiang energy group, founded in 2001 and headquartered in Hangzhou, Zhejiang Province, is mainly engaged in power supply construction, power and heat production, oil, coal and natural gas development, trade and circulation, energy technology, energy services and energy finance.
Novatec, founded in 1994, is engaged in the exploration, production, processing and sales of natural gas and liquid hydrocarbons. It is the largest independent natural gas producer in Russia.
Previously, Shenneng group also signed a gas supply agreement with novatech.
In March 2021, novatech of Russia announced that novatech’s subsidiary would supply more than 3 million tons of LNG for the Arctic LNG No. 2 project to Shenneng group in the next 15 years.
Norvatec holds 60% of the Arctic LNG 2 project, and total energy, PetroChina, CNOOC and Japan Arctic LNG each hold 10%. The project plans to build three LNG liquefaction production lines, with an annual output of 6.6 million tons and a total capacity of 19.8 million tons.
According to the news report of China Central Television, as of early December 2021, the construction progress of the first production line of Arctic LNG 2 project has exceeded 90%, and will be officially put into operation in 2023. The other two production lines will be put into operation in 2024 and 2025 respectively.
Utlenaye oil field exploited by Arctic LNG 2 project is located in Russia’s Geda peninsula. At present, the proven natural gas is nearly 1.4 trillion cubic meters and liquid reserves are 90 million tons.
In an interview with China Central Television, the head of overseas sales of novatech LNG said that the LNG supply contracts of Arctic LNG project 2 have been signed and will be delivered in 2023. Eighty percent of the LNG output of the project will be supplied to the Asia Pacific market.
China is the most important LNG importer in the Asia Pacific region. In 2021, China overtook Japan as the world’s largest LNG importer.
According to the report of LNG trade in 2021: out of control and recovery released by IHS Markit, China imported 81.4 million tons of LNG last year, a year-on-year increase of 18%; Japan’s LNG import volume was 75 million tons, basically the same as that of the previous year; South Korea’s LNG import volume was 46.4 million tons, a year-on-year increase of 13.6%, ranking third in the world.
IHS Markit said that this marks the first time since the early 1970s that China has become the world’s largest LNG importer and Japan has retreated to the second place.
In 2021, Sinopec, CNOOC Gas & Power Group, Shenzhen Gas Corporation Ltd(601139) , state power investment and Foran Energy Group Co.Ltd(002911) and other Chinese energy enterprises signed LNG long-term agreements with foreign oil and gas companies.
