Beijing Gas Group becomes China's latest importer of LNG outside dominant state energy firms, after the government permits third-party use of idle capacity at import terminals built mostly by the majors.
The Beijing firm, the dominant natural gas distributor to the Chinese capital that makes up some 9% of the country's gas use, is slated to receive its first import LNG cargo in late November, industry officials with knowledge of the matter said Sept. 23.
The 150,000 cubic-meter cargo will be sourced from French utility ENGIE, part of a cooperation agreement signed in July between Beijing Enterprises Holding Ltd., parent of Beijing Gas, and the French firm, they said.
Gas demand typically surges in winter in the 21-million-populated capital for heating homes and hotels. The metropoli is among the world's top gas users with annual consumption of 10.5 billion cubic meters, that also feeds power plants and buses.
An industry official with direct knowledge of Beijing Gas said the firm aims to become a longer-term LNG buyer with a plan to establish its own procurement team, beyond a traditional role of a middleman between Chinese energy producers and consumers.
The cooperation with ENGIE may evolve into longer-term supply deal, said the official, without elaboration.
The November cargo is slated to arrive at a receiving terminal at port Caofeidian, near Beijing, that was built by PetroChina. Price of the cargo was estimated at $7-8 per million British thermal unit (MMBtu) on delivered basis, according to two industry sources.
Before Beijing Gas, independents such as privately-run city gas distributor ENN Group and onshore LNG investor Guanghui Energy Co Ltd have imported about six spot cargoes this year, benefiting a global supply glut and oil-led price slump.
China is freeing up the nation's LNG trade as part of broad reforms that allow private companies to invest in oil and gas exploration as well as pipelines and tank farms, and to engage in importing and exporting. The aim is to help secure supplies while boosting competition and efficiency in an energy sector long dominated by state firms.
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