Insight
Are China's NOCs still over-contracted?
*Please note that this report only includes an Excel data file if this is indicated in "What's included" below
Report summary
The combination of high legacy-contract LNG prices, lower-than-expected demand and increasing competition is challenging China's NOCs' business models. In 2016, we saw the NOCs negotiate with suppliers to reduce offtake where they can, divert cargoes into the spot market, and put more effort into marketing gas domestically. In this analysis, we compare and contrast these strategies, and reflect on the NOCs' contract execution and spot activities.
Table of contents
- Competition is changing China’s LNG market
-
CNOOC – suffering expensive legacy LNG supply deals
- China’s largest LNG importer
- Emerging buyers are threatening CNOOC’s market share
- CNOOC has been buying spot LNG to reduce its overall LNG cost
-
PetroChina – relying on spot LNG in the winter, but for how long?
-
Seasonal gas demand and pipeline bottlenecks mean PetroChina requires spot LNG in winter
- Alternative supply sources may limit future winter LNG opportunity
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Seasonal gas demand and pipeline bottlenecks mean PetroChina requires spot LNG in winter
-
Sinopec – the smallest NOC buyer has marketing challenges
- Low uptake of gas makes marketing difficult for Sinopec in Guangxi
- Equity in APLNG may give Sinopec additional supply flexibility
- Are the NOCs still over-contracted?
- Appendix:
Tables and charts
This report includes the following images and tables:
- Are China's NOCs still over-contracted?: Image 1
- CNOOC monthly LNG imports in 2016
- CNOOC contracts offtake in 2016
- 2018 LNG contract price comparison*
- Impact of purchasing spot LNG (April 2017)
- Sinopec-APLNG monthly imports
- Sinopec-PNG monthly imports
- Are China's NOCs still over-contracted?: Image 6
What's included
This report contains:
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