CNOOC's Yuedong import terminal receives LNG from Australia

China National Offshore Oil Corp (CNOOC) said on Thursday the company's Yuedong LNG import terminal, whose access was sold to third party, State-owned Zhenhua Oil and private logistics firm Longkou Shengtong Energy in September, has for the first time received LNG that the latter two companies bought from Australia.

This is a milestone and a step toward greater third-party access to gas infrastructure, as the company, which built the country's first LNG terminal in 2006 and currently operates nine LNG terminals nationwide, pushes ahead with energy market liberalization, it said.

CNOOC sold access to its Yuedong liquefied natural gas terminal to State-owned Zhenhua Oil and private logistics firm Longkou Shengtong Energy in September through an auction on the Shanghai Petroleum and Gas Exchange, the first auction of this kind against the backdrop that China is pushing forward the liberalization of its vast oil and gas market.

The two companies agreed to pay CNOOC Gas and Power Group $0.04 per cubic meter of imported LNG for access to the terminal, according to a statement by Zhenhua Oil.

Analyst believes the opening of access, which gives private players the equal opportunity to secure term deals and regulated prices in the domestic Chinese market, is part of China's effort in liberalizing natural gas prices, opening up access to oil and gas infrastructure and ensuring gas supply for the upcoming heating season.

Limited access to import infrastructure has been criticized and deemed as a major barrier of China's gas industry, which makes a few players control the supply of imported LNG, said Na Min, a senior analyst for oil and gas at Bloomberg New Energy Finance

Granting TPA, or third-party access, along with other pivotal actions may help break the barriers of market entry, and further increase the utilization rate of existing LNG terminals, and help alleviate the geographic imbalance of terminals and demand centers, she said.

China's gas consumption grew 15 percent in the first half of this year compared with the same period in 2017, leading to a 50 percent surge in LNG imports, pushing them to a historic high of 24 million tons in the first half of 2018.

CNOOC has stepped up construction of its LNG infrastructure facilities in recent years while diversifying its overseas LNG sources to ensure sufficient natural gas to meet the nation's increasing demand.