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China builds largest home-grown LNG plant

26th April 2012

China’s largest LNG plant is currently under construction and is due to be up and running by 2014

Chinese LNG imports are due to rise 42 per cent this year

Chinese oil giant, PetroChina Co has started building the country's largest onshore gas liquefaction plant with home-grown technology and equipment, aiming to hone its capabilities and meet rising clean energy demand.

The Tai'an plant in eastern Shandong province will be able chill 2.6 million cubic metres (mcm) of gas per day and supply 600,000 tonnes per year (tpy) of liquefied natural gas (LNG) when it is ready for operation in late 2013, parent China National Petroleum Corp (CNPC) said on Thursday in an inhouse newspaper.

A company source told Reuters that the project would cost some 1.5 billion yuan (USD 237.94m).

PetroChina , via its LNG unit Kunlun Energy, started operating its first 1 mcm per day LNG plant on 21 April in southwestern Sichuan, and its Ansai plant in northern Shaanxi, with liquefaction capacity of 2 mcm per day, is due to be ready for use in June.

"We now have the technological capability to build a 3m tpy plant, but that scale is beyond domestic manufacturing capability for key equipment," said the company source, who declined to be named as he was not authorised to speak to the media.

"There is also no need to build such a large LNG plant in China under existing conditions, including gas supplies, demand and government policies."

To reduce the share of coal consumption and boost gas use, China's major state energy firms have in recent years focused on building long-haul gas pipelines to transport the fuel to consuming centres and earmarked hefty investments for large LNG import terminals.

Small-scale onshore gas liquefaction facilities, which are mostly private and near marginal gas reservoirs that have limited access to pipeline networks, have also boomed in the past decade. LNG output from these facilities is trucked to factories and residents, filling a supply gap.

The growing niche market has attracted attention from national champions such as PetroChina, making the sector increasingly competitive.

Many of China's existing LNG plants use technology from companies such as US firm Black & Veatch Corp, Germany's Linde Ag and France's Technip SA.

Black & Veatch and its partner Chemtex alone have secured 14 such projects in China since 2005, the firm has said.


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