China Petroleum Shandong LNG terminal plot looming

The expansion of China Petroleum's Shandong LNG (Liquefied Natural Gas) project in the terminal sector was looming as a result of a successful announcement of the Shengli Shares.

The profit-declining victory shares announced on the 20th that the company will establish Shandong Lihuayu Energy Co., Ltd. to centrally manage the natural gas investment business while participating in the establishment of Shandong Kunlun Shengli Energy Co., Ltd. (hereinafter referred to as “Kunlun Victory Company”), Linyi, and Guiyang Company. , increase investment in the field of natural gas.

A further investigation by the Economic Herald reporter found that Shengli’s involvement in the natural gas sector was due to the joint efforts of PetroChina. After the cooperation with Shengli, CNPC has established subsidiaries in Jinan, Yantai, Linyi, and Weifang in Shandong Province through Kunlun Energy. The way of local enterprise cooperation is to quickly deploy the LNG terminal market in order to gain an advantage in competition with Sinopec and CNOOC.

The “ambition” of natural gas in the victory shares of Shengli’s shares in the natural gas field is growing.

On the 20th, Victory announced that it had invested 100 million yuan to establish Lihua Energy, a wholly-owned subsidiary, to focus on the search for and management of investment businesses in the natural gas field and to unify investment entities.

However, Liu Zhiqiang, Executive Secretary of Shengli Shares, was reluctant to publicize in an interview with a reporter on the 23rd: “Can not say that natural gas will become the focus of investment in the future. At present, we are only involved in this field.”

Compared with Liu Zhiqiang's subtlety, Victory shares announced a number of natural gas investment plans on the same day.

It plans to co-fund 48 million yuan with Kunlun Energy (Shandong) Co., Ltd., Shandong Zhongguang Investment Co., Ltd. and Qingdao Runyu Natural Gas Co., Ltd. to establish Kunlun Victory Co., Ltd., in which Shengli shares accounted for 15% of the shares, and Kunlun Energy (Shandong) Co., Ltd. held 51%. The other two companies hold 19% and 15% of the shares, respectively. It is reported that Kunlun Victory will use Shandong as the center to jointly promote, develop and operate LNG refueling stations and other natural gas projects.

"Kunlun Energy has natural gas resources. It takes a look at our local resources and it belongs to each other." Liu Zhiqiang said.

According to the division of labor, Kunlun Energy (Shandong) Co., Ltd. will be responsible for contacting and prioritizing the gas source indicators required for the stable supply of gas by the joint venture company, and ensuring the supply of gas resources; the other three companies are responsible for applying for approval and registration of the joint venture company to the relevant authorities. Procedures for establishment, development of LNG refueling stations in the first phase, approval of the joint venture gas companies for approval, approval of site planning, land acquisition, construction and operation procedures. At the same time, Shengli Group also reached an agreement with CNPC Kunlun Natural Gas Utilization Company (hereinafter referred to as "China Petroleum Kunlun Company") and Xinao Gas. The three parties jointly invested 30 million yuan in cash to establish a joint venture company in Linyi, playing the three parties in gas source, technology and market. With local resources and other advantages, the company has developed natural gas comprehensive utilization projects based on industrial gas and automobile gas in Linyi City, as well as the expansion of new areas of natural gas utilization. In terms of capital contribution, PetroChina Kunlun holds 30% shares, Shengli shares holds 30%, and New Austrian Gas holds 40%.

In addition, Shengli is also preparing to establish a joint venture company with Guiyang Commercial and Storage Corporation to invest 10 million yuan in Guiyang to develop natural gas terminal comprehensive utilization projects based on industrial gas and automobile gas.

Together with the joint venture company established in the beginning of July with PetroChina Kunlun Company in Nanning, in just over a month's time, Shengli Group has established five companies to develop natural gas business, and the investment is irresistible.

In response, Shengli shares explained that natural gas is a clean energy source and is in line with the industry direction of low-carbon and environmental protection. This field will enter a period of rapid development during the “Twelfth Five-Year Plan” period. There are good investment opportunities and good development prospects. Therefore, it is decided. Increase investment in this area.

However, Liu Zhiqiang also emphasized that the LNG project of Kunlun Energy (Shandong) Co., Ltd. is still in the planning and construction stage, and the joint-stock project of Shengli also needs a construction period of one or two years, and it may not see benefits in the short term.

A survey conducted by PetroChina LNG Terminal Reporter found that most of the joint venture projects of Shengli Group are related to CNPC. Among them, CNPC Kunlun Company is a wholly-owned subsidiary of CNPC, mainly engaged in the development and utilization of compressed natural gas, liquefied natural gas, and retail sales of automotive gas. Kunlun Energy (Shandong) Co., Ltd. is a holding subsidiary of Kunlun Energy Co., Ltd. (a holding company of PetroChina) and mainly operates liquefied gas and LNG refueling stations.

Through a series of actions to win shares, CNPC’s intentions in the LNG terminal market, especially the Shandong market, have become increasingly clear.

The Herald reporter learned that after Kunlun Energy (Shandong) Co., Ltd. was established in Qingdao in June 2010, it quickly expanded in Shandong through cooperation with local companies. Only known to the Herald reporter, Shandong Odeon Energy Co., Ltd. has established a joint venture with Shandong Alder Gas in Linyi, Weifang Tiantai New Energy Co., Ltd. and Weifang Tiantai New Energy Co., Ltd. have been established, and Taishan Gas Group has established Taian Kunlun Energy. Co., Ltd. and subsidiaries such as Jinan and Yantai.

As for the scope of business, it is the LNG business of non-pipeline industrial gas and high-end industrial users in the relevant cities and surrounding areas, gas-to-oil business for trucks and long-distance passenger vehicles, LNG gas-to-oil service for offshore fishing vessels and inland shipping vessels, Urban pipe network peaking and pipeline gas supply business.

“Using the layout of cooperation with local companies can be seen as our strategy.” Mr. Wang from the Enterprise Management Department of Kunlun Energy (Shandong) Company told the Herald reporter on the phone that more information could be passed because of the company’s strategy. The network understands that he is not convenient to say.

However, referring to the principle of division of labor in cooperation with Shengli Group, Kunlun Energy (Shandong) Co., Ltd. should also be optimistic about their advantages in terms of “market and local resources” in selecting other partners, and can quickly enter into the LNG market of the city where it is located and complete the layout.

The background is that Kunlun Energy (Shandong) has planned to construct a LNG liquefaction plant with a daily liquefaction capacity of 2 million cubic meters in the Tai’an area and a 500,000 cubic meter LNG revolving area in the Qingdao area to ensure that the Shandong region controls 5 billion cubic meters of natural gas resources. m/year. Coupled with the LNG terminal program on the Shandong coast, the solution to terminal exports will be a more urgent task in the future.

From a larger perspective, this is a continuation of the LNG layout in PetroChina and Sinopec and CNOOC.

It is understood that the first LNG project of Sinopec was approved by the National Development and Reform Commission last year and started construction in Qingdao. The CNOOC Shandong LNG project is also preparing to settle in Qingdao. It is actively preparing relevant procedures and is seeking approval for construction as soon as possible.

After setting up an LNG receiving station, it is inevitable to seize the terminal market to see who is quick.

The Herald reporter learned that in cooperation with local companies, Kunlun Energy signed a strategic cooperation agreement with the Shandong Provincial Department of Transportation and Communications in Jinan on August 19, which will be used along existing and planned highways and national highways in Shandong Province. LNG refueling stations will be constructed, specifically in the expressway service areas, highways (management) stations, and toll collection stations for roads that have been cancelled; at the same time, LNG refueling stations will be built in the service areas of coastal ports and inland shipping planning. As for the construction of LNG refueling stations for the long-distance and bus transportation hubs in the province, the specific construction site will be negotiated and determined by Kunlun Energy Co., Ltd. and all the property right units.

In the use of local government and corporate resources to snatch LNG terminal market, CNPC is increasingly exerting force.

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