China completes first yuan-settled international LNG trade
Chinese oil and gas player CNOOC and French energy giant TotalEnergies have completed China’s first yuan-settled LNG trade through the Chinese energy trading centre Shanghai Petroleum and Natural Gas Exchange (SHPGX).
According to SHPGX’s statement from 28 March, TotalEnergies supplied CNOOC with approximately 65,000 tons of LNG imported from the United Arab Emirates (UAE). The transaction was settled using Chinese currency.
It was described as a major event in the country’s oil and gas market reform and CNOOC’s beneficial practice in promoting the globalisation of energy trade and creating a diversified ecology of LNG trading.
As China’s largest LNG importer, CNOOC has a 20-year sales and purchase agreement (SPA) with US LNG export project developer Venture Global. Under the deal, Venture Global will supply 2 million tonnes per annum (mtpa) of LNG to CNOOC on a free-on-board basis from its Plaquemines LNG export facility in Louisiana.
The company also has a 15-year SPA with state-owned QatarEnergy, formerly Qatar Petroleum, for the offtake of 3.5 mpta of LNG.
As revealed in its 2023 Business Strategy and Development Plan, the Chinese oil and gas giant plans on ramping up oil and gas production this year by bringing new projects on stream while advancing the transition to low-carbon and renewable energy.
In addition, CNOOC aims to install the world’s largest storage tanks at the Binhai LNG import terminal in Jiangsu by the end of 2023 as part of the terminal’s expansion plans.
Qatargas, an LNG production unit of QatarEnergy, delivered a commissioning LNG cargo to China’s Jiangsu-Binhai LNG terminal, owned and operated by CNOOC in late 2022.
Following the ongoing expansion, the terminal will have ten tanks and the capacity to annually receive six million tonnes of LNG.
The Binhai LNG terminal will start operations by the end of 2023 as the third operating LNG import facility in Jiangsu province.
In addition to LNG operations, the project will also feature facilities for hydrogen production with gas.