Changfeng Energy, Chinese energy provider completed its trial run of a liquefied natural gas (LNG) shipment from Canada to China using ISO-containers.
The LNG shipment from the Vancouver port was arranged by Changfeng and it arrived at the Shanghai port on November 8, 2018, and has now cleared customs.
The company said that LNG exported to China was procured by Changfeng from a British Columbia-based energy provider, and Sanya Changfeng Offshore Natural Gas Distribution, a unit of Changfeng, is the importer.
The LNG received in Shanghai will be sold to Hebei Riheng Clean Energy, another Changfeng unit, and will be transported to Hebei to support the LNG distribution services of Riheng Energy to areas where pipeline gas is not accessible.
Changfeng had obtained an export order from the Canadian National Energy Board for the LNG export and Sanya Changfeng had received all necessary permits for the LNG import in China.
According to the recent energy reform policies of the Chinese government, the country is shifting away from a coal-based economy and is increasingly relying on natural gas as the source of energy consumption.
In particular, Changfeng said that, in the winter months due to higher demand for natural gas required for heating in China, the available supply of natural gas may be lower and trucked LNG prices may increase.
Based on Wood Mackenzie estimates, trucks carried approximately 19 million tons of LNG to customers last year, accounting for 12 percent of China’s total LNG consumption.
Further, unlike the market price of pipeline gas, which is regulated by the Chinese government, LNG prices are relatively deregulated and market-oriented.
Accordingly, the company has been seeking to broaden its supply base beyond that of China, to sources such as Canada, in order to benefit from opportunities in respect of LNG supply.
As a Canadian-listed energy company operating in China, the company recognizes the potential synergy of Sino-Canadian energy trading and natural gas supply, and has taken steps such as the aforementioned trial run LNG shipment to position the company to seize such opportunities, Changfeng said.