The state-owned China Petroleum and Chemical Corp, Sinopec is reportedly building a natural gas storage facility, with a capacity of 55.6 billion cu m in the northern Henan area, to tackle flawed supply during winters.
Sources claim that China is estimated to become the world’s largest gas trader in two to three years. But the insufficiency in pipeline and storage capacity has hampered LNG demand, persuading end users to depend on last-minute logistical solutions.
According to trusted sources, increasing gas storage capacity in northern China will also help in solving supply issues in central and eastern China, and fix surges in the price of LNG which reached $11.70 per million British thermal unit last winter.
The firm did not specify a duration or investment amount for building the new storage capacity. Incidentally, Sinopec joined forces with PetroChina and has declared the construction of about 20 Bcm of underground storage in northeast China, stated sources.
According to Reuters, Sinopec and PetroChina will conjointly control all oil and gas chains within the country, about 80% of its production and refining, and 90% of its retail sales.
Sources further stated that the merger may give the entity more negotiating power with crude suppliers, but certainly, there will be some pitfalls.
Sinopec’s gas storage center in Henan will cover sixteen facilities constructed over deserted oil and gas fields within the precinct, including the Zhongyuan oilfields, stated the company. Li Cungui, Director of Oil and Gas Development Management, Zhongyuan Oilfield, claimed that after 40 years of exploration and development the oilfield had been completely used up, but the underground reservoirs can offer suitable space for gas storage.
Reliable repots claim that gas demands in China are estimated to grow by 60% over 2017-2023. The country’s policies to control fuel switching and air pollution can account for 37% growth in global demands within five years, reported the International Energy Agency.