China's CNOOC to trial LNG delivery by rail: executive

FILE PHOTO: The company logo of China National Offshore Oil Corporation (CNOOC) is displayed at a news conference on the company's annual results in Hong Kong, China March 24, 2016. REUTERS/Bobby Yip/File Photo

BEIJING (Reuters) - China National Offshore Oil Corp (CNOOC) is working with a railway company to trial delivery of liquefied natural gas (LNG) by rail, a senior company executive said on Tuesday.

The two-year trial will involve sending LNG to central China from four terminals - Guangxi, Zhuhai, Zhejiang and Tianjin, Wang Si, head of the company’s LNG ISO Tank Container Intermodal Transport Project, told a conference.

China is the world’s second largest importer of LNG but lacks natural gas pipeline and storage infrastructure.

While trucks carrying ISO tanks can serve distances of 500 kilometers, trains will serve longer distances of over 1,000 km, Wang said.

Each ISO tank can carry 17-18 tonnes of LNG and the trains will be able to take 50 such tanks, he said.

CNOOC, China’s largest LNG importer, aims to transport 1 million tonnes per annum (mtpa) of LNG using ISO tank containers over 2019-2021, increasing this to 2 mtpa by 2022-2023, he added.

The trial is pending approval from China Rail Company, he said.

CNOOC also plans to use ISO tanks for LNG storage as they are about 30% cheaper than current storage facilities and save space, Wang said.

Reporting by Muyu Xu and Shivani Singh, writing by Jessica Jaganathan, editing by Louise Heavens and Jason Neely