Sinopec, Zhejiang group to build LNG terminal, first phase set for end-2021

FILE PHOTO: The company logo of China's Sinopec Corp is displayed at a news conference in Hong Kong, China March 26, 2018. REUTERS/Bobby Yip

BEIJING (Reuters) - China’s Sinopec Corp has teamed with Zhejiang Energy Group Co Ltd on a 3 million tonne-per-year liquefied natural gas (LNG) terminal in east China, with the first phase set for operation at end-2021, the state oil giant said on Wednesday.

The project, to be built in Wenzhou of Zhejiang province, includes four tanks each able to store 200,000 cubic meters of LNG, a berth to dock tankers of 30,000 cubic meters to 266,000 cubic meters, as well as a 26-km (16-mile) pipeline.

The two companies launched on Monday new entity Zhejiang Zheneng Wenzhou LNG Co Ltd that is 51 percent owned by the Zhejiang group, 41 percent by Sinopec and 8 percent by a local investment firm, said a Sinopec press official.

This will be Sinopec’s fourth LNG receiving terminal after similar-sized facilities built in Qingdao, Beihai and Tianjin. The state group is expanding its LNG receiving capacity rapidly under Beijing’s push to replace coal with cleaner gas.

Zhejiang Energy Group, established in 2001, is a provincial government-backed entity engaged in thermal power generation and pipeline gas distribution, according to its website.

The group supplies 61 million tonnes of coal a year, nearly half of Zhejiang’s consumption, and distributes 8.7 billion cubic meters of natural gas a year, meeting 83 percent of the province’s need for gas.

The Wenzhou terminal puts the Zhejiang group into China’s so-called “second-tier” of LNG players, which are local-government-backed city gas distributors that are emerging as new merchants in the global gas market.

Reporting by Chen Aizhu; Editing by Tom Hogue