Important Milestone for China's Global LNG Position

An employee of CNOOC cleans LNG transmission facilities in Qingdao, Shandong province. [Photo by Yu Fangping/For China Daily]

The world's first coal seam gas (CSG) to liquefied natural gas (LNG) project saw its 800th LNG cargo arrive in China recently, which marked another important milestone since it started commercial operation in May 2015, said its operator CNOOC Gas & Power Group.

The LNG carrier Barcelona Knutsen set sail from the LNG Plant on Curtis Island and arrived safely at Zhejiang LNG Terminal on April 18th, the world's first coal seam gas to liquefied natural gas project that CNOOC Gas & Power Group invested in as a joint venture partner.

The project has so far supplied approximately 31.45 million tons of LNG to the Chinese domestic market, which takes up more than 50 percent of the total QCLNG project production, it said.

"Under the circumstances of the on-going COVID-19 pandemic, which is still infecting globally and is affecting supply chains around the world at an unprecedented speed and scale and flooding, the achievement of this milestone is even more significant and meaningful", said Zhang Rongwang, CNOOC Gas & Power Group vice president.

"It is the result of the close cooperation, constructive dialogue and common focus on safe, reliable and stable operations with the operator and other JV partners."

As the world's number three LNG buyer, CNOOC has signed long-term LNG purchase contracts of 22.4 million tons per year, built and put into operation of 5 LNG Terminals with annual receiving and processing capacity of 29.6 million tons, and controlled 7 power plants with a total installed capacity of 6.78 million kilowatts, it said.

CNOOC respectively acquired equity interest in QCLNG project in 2010 and 2013 increasing its equity ownership to circa 25 percent. It has also executed 8.6 million tons per year LNG sales and purchase agreement with the QCLNG project operator Royal Dutch Shell.

QCLNG project is located on Curtis Island, Gladstone, in Queensland. The CSG from upstream comes from the Surat Basin in Queensland and is transported via a long-distance underground pipeline network to the Curtis Island LNG Plant for the liquefaction process. LNG is then sold to Asia-Pacific markets including China and Japan.

This project is the country's first expansion from midstream and downstream to upstream of the global LNG industry value chain, from a single market buyer in the past to a market buyer that pays equal attention to nature resource development. It is of great significance to enhance China's position in the global LNG industry, said CNOOC.