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PetroChina to largely increase LNG price

BEIJING – PetroChina, one of China’s oil tycoons, has issued an internal document to raise LNG price of its plants nationwide to the highest level of non-resident gas, according to a person close to PetroChina, reported Diyi Caijing Ribao or China Business News.

Since PetroChina provides 70 percent of LNG gases in China, producing cost of LNG enterprises will increase ¥1,400 ($224)/ton after the price adjustment.

“It is unacceptable,” said an executive of an LNG plant in Northwest China. “All medium and downstream enterprises of LNG industry will not survive after the price increase,” added the executive.

Imported LNG of China National Offshore Oil Corp. (CNOOC) also faces the pressure of price increase, said the report.

“Together with the local development and reform commission, we are trying to negotiate with the upstream enterprises of PetroChina about the price increase,” said an executive of an LNG plant of PetroChina in northwest region.

According to the executive, compared with the original price of ¥1.2/square meter, the new ¥2.48/square meter LNG gas will be 100 percent more expensive than the original. “No one will keep on using LNG trucks if we sell gas at this price to LNG stations,” said the executive.

After two months of negotiation, the Indonesia part will increase LNG gas price of 70 percent to its LNG plant in CNOOC Fujian reception point. It is also reported that Australia and Qatar are raising prices to its LNG export stations in China.

The price upsurge of domestic and import LNG gas will reshuffle the downstream market of China’s LNG market. Some LNG gas stations under construction have already been suspended, according to an insider of a downstream enterprise in Northern China.

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