Sinopec plans giant gas storage facility

China

BEIJING, May 24, 2017 – China’s Sinopec began building a massive natural gas storage and logistics centre in the central Henan province, the firm said on Wednesday.

The facility, the nation’s largest with a capacity of some 10 bcm (353 bcf), is expected to be completed in 2018 and to supply gas to Beijing, Tianjin and the central parts of the country, Reuters reported.

Faced with a formidable air pollution problem at home and international pressure to reduce carbon emissions, China in recent years has been seeking to reduce its dependence on coal. Natural gas, a cleaner alternative, is a key part of the country’s efforts to diversify its energy mix.

“With abundant supply potential, Rystad Energy expects US gas companies to see a large LNG export potential to China after President Donald Trump and President Xi Jinping reached the bilateral trade agreement last month,” energy consultancy Rystad Energy said in a note on Tuesday.

“Sinopec’s invitation to welcome Cheniere Energy to their offices in China last week, clearly underpins Chinese energy companies’ mutual interest,” the note added, pointing out that about 7% of cargoes exported through the terminal so far have ended up in China “through spot agreements and intermediaries.”