Insight
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8 Pages

Are China's NOCs still over-contracted?


Are China's NOCs still over-contracted?

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.

What's included?

This report includes 1 file(s)

  • Are China's NOCs still over-contracted? PDF - 651.87 KB 8 Pages, 1 Tables, 8 Figures

Description

This LNG Insight report highlights the key issues surrounding this topic, and draws out the implications for those involved.

If you want to look at the trends, risks and implications of this topic, this report gives you an alternative point of view to help inform your decision making.

Offering bottom-up market analysis for over 150 LNG supply assets, 28 LNG-importing countries and more than 500 LNG contracts, Wood Mackenzie is the definitive and trusted resource for the LNG industry.

We use our robust database and expert industry knowledge to help you understand the dynamics of the global LNG industry and identify emerging trends and opportunities.

  • 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
  • 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:

In this report there are 9 tables or charts, including:

  • Competition is changing China’s LNG market
    • Are China's NOCs still over-contracted?: Image 1
  • CNOOC – suffering expensive legacy LNG supply deals
    • CNOOC monthly LNG imports in 2016
    • CNOOC contracts offtake in 2016
    • 2018 LNG contract price comparison*
    • Impact of purchasing spot LNG (April 2017)
  • PetroChina – relying on spot LNG in the winter, but for how long?
    • Are China's NOCs still over-contracted?: Image 6
  • Sinopec – the smallest NOC buyer has marketing challenges
    • Sinopec-APLNG monthly imports
    • Sinopec-PNG monthly imports
  • Are the NOCs still over-contracted?
  • Appendix:
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