CIMC ENRIC Holding Ltd will deliver two liquefied natural gas storage tanks in 2018, with a capacity of 160,000 cubic meters each, to its client in Zhoushan, Zhejiang province, the company said on Monday.
This is part of the country's first project to use LNG to fuel international vessels. The design, procurement and construction work will be completed by Nanjing Yangzi Petrochemical Design Engineering Co Ltd and Germany-based TGE Gas Engineering GmbH, two subsidiaries of CIMC ENRIC.
The company said they completed the tank body construction, including the tank wall and inner tank for its client－Langfang-based ENN Group this week.
Sun Hongli, deputy general manager of CIMC ENRIC and managing director of TGE, said that even though China's coastal LNG receiving facilities and inland LNG plant encountered oversupply this year, the growing trend of LNG imports hasn't changed in the long term, thanks to the promotion of environmental policies and gradual opening up of the natural gas market.
"We therefore expect that the price regulatory mechanism can be formed by 2020 and the industry will experience a boom," said Sun.
Two LNG tanks for the ENN (Zhoushan) LNG receiving terminal are located in the marine industry cluster zone of the Zhoushan Archipelago New Area.
The total investment in this project is 10 billion yuan (.44 billion). The project is divided into three phases. When completed and put into operation, the annual LNG handling capacity will reach 10 million cu m.
China's LNG imports account for more than 30 percent of domestic consumption. As global natural gas trade volume reached 1 trillion cu m in 2015, more than 40 percent of the global natural gas trade depends on marine LNG transportation.
"Boosted by policies for replacing coal and oil by gas, there is still big room for development for China's natural gas sector," said Sun.
According to ocn.com.cn, a Shenzhen-based consulting platform, China's natural gas import volume via marine LNG transportation is expected to reach or exceed 40 billion cu m over the next five years.
"The global energy glut and the sluggish economy will continue to drive down LNG prices, which means that imports of the supercooled fuel are cheaper than domestic production," said Zhang Yong, a professor specializing in energy security at Nankai University in Tianjin.
"China's LNG imports and related infrastructure facilities, including small and medium-sized LNG carriers, truck tankers and specialized trains, will surge in the long term amid mounting pressure caused by air pollution," Zhang said.
China currently operates more than 10 LNG receiving terminals and there are nearly 20 facilities either under construction or being planned, according to information from Shanghai Oil and Gas Trading Center, a national level oil and gas trading platform.