LNG niche plants advancing in China, fed from domestic NG
Implications
Ningxia Hanas Natural Gas Co., located in the province of Ningxia adjacent to Mongolia, has just awarded a contract to Technip for the construction of a midsize LNG plant of 100 MMSCFD (0.8 mta). The plant will consist of two 50 MMSCFD trains based on Air Products liquefaction technology. The LNG will be distributed by specially designed trucks to the far away developed provinces on the Chinese East Coast.
Analysis
Before the award to Technip, China had completed at least three operating LNG-Mini plants with 50 MMSCFD in Xinjiang, 20 MMSCFD in Guangxi and a 10 MMSCFD pilot plant in Henan province, owned by Sinopec. In addition Black & Veatch with Chemtex have started up the Erdos plant with 26 MMSCFD capacity in Inner Mongolia and B&V / Chemtex completed construction of an 80 MMSCFD plant for CNOOC on Hengqin island.
Presently B&V / Chemtex are pursuing four more plants to be located in the central Sichuan province (60 MMSCFD), the central Shaanxi province (18 MMSCFD), the northwestern Gansu province (11 MMSCFD) and in the northwestern Xingjiang region (53 MMSCFD).
Without a national pipeline grid there is always a market for domestically produced LNG, transported by trucks to cities not being able to access pipeline gas.
The LNG mini to midsize LNG plant developments are of interest. Cost of these plants are lower by an order of magnitude when compared to world scale LNG liquefaction plants.
The U.S mini LNG plants being operated and/or presently built for transportation fuel supply range from 1.6 to 14 MMSCFD in capacity. Of course, they are even more economical since they are fed with high pressure pipeline NG.
It becomes now apparent that here is a worldwide niche LNG market for players like Air Products, Linde, Technip, Black & Veach / Chemtex, Chart and lately also OnQuest.
Finally we have to point out that China is becoming a very serious LNG player, just having started operation of their second LNG terminal at Fujian with close to 0.8 bcfd capacity. In addition, CNOOC plans to start up a third terminal at Shanghai with another 0.8 bcfd capacity.
In summary, LNG liquefaction from 1 MMSCFD to bcfd's and transportation and distribution of the resulting LNG quantities derived from remote gas fields of any reasonable size has been proven and will be practiced in the near future in many more locations than China.
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