The production losses promoted China's LNG plants to lower their utilization rates further during the week ended November 9, although some plants resumed the production from overhaul.
The average capacity utilization rates among domestic 244 LNG plants stood at 59.57% on average by the week ended November 9, a decrease of 1.18 percentage points from the prior week, according to data from OilChem.
The 244 plants had a combined LNG production of 717.19 million cubic meters during the same period, down 1.94% from a week ago, data showed.
The decrease was attributed to the production reduction of LNG plants in Northeast China, which suffered severe production losses as a result of high feed gas prices, low LNG prices and weak city gas demand although the heating started in some places like Beijing and Shanxi. In addition, some others plants in the region, such as Xinjiang Xinye Energy & Chemical and Shaanxi Shengda Zizhou, also shut the production, which further pulled back the capacity utilization rate.
Looking ahead, Inner Mongolia Zhongneng Natural Gas, Xinjiang Xinye Energy & Chemical and Shaanxi Longmen Coal Chemical have planned to resume the production in the coming days. Moreover, the closed LNG plants in Northwest China might ramp up the production on improving production profits against the backdrop of falling feed gas prices and increasing city gas demand with the arrival of the comprehensive heating season starting from November 15.
Therefore, OilChem expects domestic LNG plants' capacity utilization rates to pick up in the later stage.
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