Rising feed gas prices promoted China's LNG plants to lower their utilization rates during the week ended October 12, after they ramped up LNG production in the previous week due to low feed gas prices.
The average capacity utilization rates among domestic 233 LNG plants stood at 60.52% on average by the week ended October 12, a decrease of 2.94 percentage points from the prior week, according to data from OilChem.
The 233 plants had a combined LNG production of 690.76 million cubic meters during the same period, down 4.63% from a week ago, data showed.
Looking back, the capacity utilization rates of domestic LNG plants were as high as 66% during the National Day holiday, as state-owned PetroChina cut feed gas delivery prices to Yuan 2.08/cum over October 1-5, which was equivalent to a production cost of Yuan 3,795/t, much lower than Yuan 4,440-4,575/t in the last auction settled in H2 September.
After that, PetroChina raised the feed gas auction prices to Yuan 2.35-2.43/cum over October 6-10, equivalent to a production cost of Yuan 4,200-4,320/t, which resulted in falling capacity utilization rates, with the daily utilization rate even falling to 58.54% at the lowest.
Looking ahead, Inner Mongolia Zhongneng Natural Gas and Hebei Zhongxiang Energy, each with a capacity of 3 million cum/day, have planned to resume the production next week, according to OilChem, but domestic LNG plants' capacity utilization rates are projected to drop to 59.33%, slightly lower than this week trailing high production in the early part of this week.
China LNG Plants' Production and Capacity Utilization Rate
Source: OilChem
China LNG Plants' Capacity Utilization Rate Outlook
Source: OilChem
Written by Sunny Fang, fss@oilchem.net
Edited by Aggie Hu, huchenying@mysteel.com