Toronto-listed CF Energy has reached a deal with China National Offshore Oil Corporation to buy gas from CNOOC’s “Eastern 13-2” offshore gas field.
CF Energy, an energy provider in China, said Friday that its subsidiary Sanya Changfeng Offshore Natural Gas Distribution Co., that distributes pipeline natural gas in Sanya, had signed the purchasing contract for the new Hainan province gas source from CNOOC’s gas field.
“The contract stipulates a price of RMB1.88/m3 for the natural gas from June 17, 2019, to December 31, 2019, and RMB 1.93/m3 for the year 2020. The quota of natural gas allotted to the Company is 22,740,000 m3 and 49,000,000 m3 respectively for the period from June 17, 2019, to December 31, 2019, and the year 2020,” CF Energy said.
CF Energy said: “The city natural gas in Hainan was mainly sourced from the gas field exploitation in the South China Sea and LNG [as] supplemental gas source. In recent years, the supply volume of pipeline natural gas from the gas field has decreased due to the decayed capacity in Yacheng 13-1 gas field of CNOOC, the largest natural gas supplier in Hainan.”
“City natural gas operators used LNG as a supplemental gas source for sales. The use of more expensive LNG as a supplemental gas source was a significant factor in the recent drop in gross profit margin of CF Energy’s Sanya gas distribution operation. Going forward, with the new gas source available, the Company expects its overall gross profit margin to improve and normalize at previous levels,” CF Energy said.
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