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Monday, March 27, 2017

CNOOC Diverted Two LNG Cargoes from Tianjin After Pipeline Fire

January 10, 2017

China's state-owned energy company CNOOC diverted two cargoes of imported liquefied natural gas (LNG) after a pipeline fire in northern China's Tianjin, though imports were normal as of Monday, traders with knowledge of the matter said on Tuesday.

Reuters reported on Dec. 28 that a natural gas pipeline in Tianjin was closed after it ruptured and caught fire.

Two sources with knowledge of CNOOC's gas operations in Tianjin said CNOOC diverted the LNG cargoes after the accident on the pipeline, which is connected to a domestic gas consumer.

"Imports are now back to normal," said one source, adding that the cargoes were sold back to the supplier under force majeure terms. The source did not give further details.

A CNOOC press official was not immediately able to comment.

CNOOC, parent of offshore oil and gas producer CNOOC Ltd , operates a floating LNG receiving facility that can take about 2.2 million tonnes per year of gas.

Chinese state energy firms have promised to boost supplies of cleaner-burning LNG over the winter months to help curb the use of the coal burned widely in northern parts of the country for heating, a main cause of hazardous smog.

Disruption to the pipeline system, which normally meets nearly half of peak winter demand of 15 million cubic metres/day, comes at a bad time for CNOOC given the cold snap fuelling gas burn in northern China, Energy Aspects' Asia analyst Michal Meidan wrote in a report on Tuesday.

"CNOOC is seeking to mitigate the supply shortfall - which could reach up to 0.10-0.12 billion cubic metres - by buying LNG from nearby plants and delivering it by truck to its customers," Meidan said.

(Reporting by Oleg Vukmanovic in Milan and Chen Aizhu in Beijing)
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