PipeChina offers gas storage capacity on SHPGX

Chinese state-owned oil and pipeline gas firm PipeChina will offer 100mn m³ of storage capacity at its Wen23 underground gas storage facility in north China's Henan province through a tender on 21 April on the Shanghai petroleum and natural gas exchange (SHPGX).

This will be the national pipeline firm's maiden offer of gas storage capacity since it started operations on 1 October 2020. Interested gas suppliers can register their interest to participate in the tender up to 16 April, with the tender scheduled to take place five days later between 10-10.30am China time (02:00-02:30 GMT).

The winning bidder is expected to manage the gas storage service at Wen23 between 1 May and 31 March 2022, with gas injections taking place between 1 May and 31 October and withdrawal and supply of gas between 15 November and 31 March 2022. It is also expected to submit a gas injection and supply plan within 15 days of the transaction on the exchange.

The 100mn m³ of gas to be injected into Wen23 based on the offered capacity is equivalent to around 77,000t, or one cargo, of LNG. Working gas volume at Wen23 is around 3.27bn m³.

Gas injections into underground sites such as Wen 23 are aimed at helping to ensure adequate supplies during winter, while promoting underground gas storage as a means to smooth out any demand-supply imbalances between off-peak and peak demand seasons. The country's heating season typically starts from mid-November.

Wen 23 is one of three underground gas storage facilities that PipeChina operates, including the Jintan and Liuzhuang sites in Jiangsu province. PipeChina also operates 48,800km of natural gas pipelines in China, with transmission capacity of around 240bn m³/yr and six LNG receiving terminals with 22.8mn t/yr of capacity. State-controlled PetroChina, Sinopec and CNOOC owned these assets before transferring them to PipeChina before it began operations. PipeChina was set up in December 2019 as part of broader reforms to open up China's domestic oil and gas industry.

PipeChina in January invited bids for import capacity at its LNG import terminals equivalent to around 6.4mn t of LNG, providing more third-party import access than previously. This followed its offer of spare import capacity for November and December in mid-October last year when it also published regasification tariffs for its terminals.

By Camille Klass