China National Offshore Oil Corp. (CNOOC) is preparing to open up its liquified natural gas (LNG) import terminals to third-party access.
CNOOC said on Wednesday that this would be a first in the country and that it comes after two trial runs in late 2018.
According to the company, each third-party user must take in a minimum of four cargoes (260,000 mt) per year over a ten-year period, a statement by the Shanghai Petroleum and Gas Exchange said.
The requirements could be increased, in multiples of four cargoes, subject to bilateral discussions, a source told Platts.
This initiative came in the middle of several gas market reforms following the Chinese government’s push to set up a national pipeline company.
As for allocation, half of the volumes will come from CNOOC’s long-term contract portfolio, while the other half gives the user the flexibility of direct procurement in the international market.
A source with knowledge of the matter told Platts that greater access could be allowed in the future with TPA potentially being granted to more than one company.
Another source told the energy and commodities information provider that while the initiative opened the way to allow more independent buyers to enter the international market, there was a concern about having to lock in cargoes at term prices for the next ten years.
LNG World News Staff