Pipeline gas trials begin from Zhoushan LNG terminal

Gas from Chinese independent ENN's 3mn t/yr Zhoushan LNG receiving facility has started to flow through a completed pipeline, connecting the terminal to east China's Zhejiang provincial network as part of trial operations.

Gas transmission from the Zhoushan terminal to Zhenhai in Zhejiang's Ningbo city began yesterday. The pipeline comprises a 59.3km sub-sea section and a 21.7km onshore section with supply capacity of 8bn m³/yr.

ENN had targeted the start of trial operations on the pipeline from Zhoushan from late in this year's third quarter, following completion of construction and connectivity to the provincial grid in June.

The start of flows from Zhoushan marks the introduction of an eighth source of gas into the provincial gas pipeline system. The seven other gas sources include regasified LNG from the 3mn t/yr state-owned CNOOC-operated Ningbo LNG terminal, the first and second West-to-East gas pipelines, fields in the East China Sea, gas from Sichuan, the Lishui 36-1 gas field offshore Zhejiang and coal-bed methane gas from Xintian in Xinjiang.

Regasified LNG from the Zhoushan terminal is expected to be distributed via pipeline and connect to the Hangzhou-Ningbo provincial natural gas pipeline during the trial phase of operations. It is unclear how long the trial phase will last and when commercial sendout from the pipeline will begin.

ENN has long-term LNG supply agreements totalling 2.65mn t/yr from Total, Chevron and Australian independents Origin and Woodside, with the Woodside deal for 1mn t/yr scheduled to start in 2025.

ENN said in early July that it was still applying for relevant approvals from various government departments, with negotiations still taking place with the Zhejiang provincial government and government-owned pipeline operator Zhejiang Energy on pipeline transmission quotas and tariffs.

More gas supplies are expected to become available in Zhejiang to meet rising demand as Zhejiang Energy has plans to bring on line two new LNG terminals in the province. The firm is jointly developing with state-controlled Sinopec the 3mn t/yr Wenzhou LNG receiving terminal in Zhejiang's Wenzhou city, which is scheduled to come on line next year. It has plans to develop a 12mn t/yr LNG receiving terminal in Zhoushan with Guangdong-based utility Shenzhen Energy and the management committee of Zhoushan's Liuheng county. It does not own or operate any terminal currently but has a 29pc stake in the Ningbo terminal.

Gas consumption in Zhejiang rose by 9.6pc to 14.8bn m³ in 2019 from 13.5bn m³ in 2018, according to provincial authorities. Pipeline gas consumption accounted for 11.8bn m³ of Zhejiang's total gas consumption last year, with non-pipeline gas consumption totalling 3bn m³.

By Camille Klass