China's LNG plants' capacity utilization rates continued the downtrend during the week ended December 7, as some plants suspended the production due to higher feed gas prices.
The capacity utilization rates among domestic 246 LNG plants stood at 52.6% on average by the week ended December 7, a decrease of 0.93 percentage points from the prior week, according to data from OilChem.
The 246 plants had a combined LNG production of 636.85 million cubic meters during the same period, down 1.3% from a week ago, data showed.
The decrease was attributed to the production suspention of some LNG plants in Northwest and Southwest China, which suffered severe production losses due to higher feed gas prices as a result of the lack of feed gas supply since the start of the heating season, together with weaker-than-expecetd demand in view of high LNG prices.
State-owned PertroChina offered 62.16 million cubic meters of natural gas to LNG plants in the west part of China for delivery over December 1-7 for auction. The transaction was settled at Yuan 4.4-4.51/cu m, up Yuan 1.42/cu m at the low end and Yuan 1.52/cu m at the high end from last auction delivered November 21-30. This is equivalent to a production cost of Yuan 7,275-7,440/t, much higher than Yuan 5,145-5,160/mt in last auction.
Looking ahead, city gas demand will increase with the tempertures getting lower, which may make the PNG supply shorten again. In addition, PertroChina offered 84 million cubic meters of natural gas to LNG plants in the west part of China for delivery over December 8-14 for auction, which was settled at Yuan 3.3-3.5/cu m, down Yuan 1.1/cu m at the low end and Yuan 1.01/cu m at the high end from last auction delivered December 1-7.
Therefore, some plants are expected to resume the production from overhaul, driving the overall capacity utilization rates to rise slightly in the coming days.
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