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Petroleum industry

CLP Power and Partners Compete for Shenzhen LNG Terminal Contract

Strategic Insights

— 2 min read

CLP Power, the Hong Kong electricity utility, is competing in a joint venture with Exxon Mobil and Japan's Chuba Electric Power for the US$870 million first phase of a liquefied natural gas (LNG) terminal and pipeline system in Shenzhen. The project, led by China National Offshore Oil Corporation (CNOOC), will select the winning foreign group by the end of this year, and construction is expected to start in 2002. The terminal will have a capacity to import 3 million tonnes of LNG a year, rising to 5 million tonnes by 2008.

Key Takeaways:

  • CLP Power, Exxon Mobil, and Chuba Electric Power are competing for the US$870 million first phase of the LNG terminal and pipeline system in Shenzhen.
  • The project, led by CNOOC, will select the winning foreign group by the end of this year.
  • Construction of the terminal will start in 2002, with completion in 2005.
  • The terminal will have a capacity to import 3 million tonnes of LNG a year, rising to 5 million tonnes by 2008.
  • The foreign group will take a 30 per cent stake in the development of the terminal and associated pipeline distribution network.
  • Two pipeline lines will be built, one covering 215 kilometres and the other covering 182 kilometres, with the cost of the second stage estimated at over US$250 million.
  • The project includes the construction of two LNG power plants, conversion of three existing oil-fired stations to gas operation, and further gas pipelines.
  • The pipeline network will be built over 10 years and link the northern and southern parts of the country.
  • The world trade in LNG is forecast to grow by 7 per cent to 8 per cent a year over the next 10 years, with projects in China, Indonesia, Egypt, and Iran.
  • The trade in LNG has grown 60 per cent since 1990, largely due to deregulation in the electricity generating industries in the US and Europe.

Statistics:

  • US$870 million: The value of the first phase of the LNG terminal and pipeline system in Shenzhen.
  • 3 million tonnes: The capacity of the terminal to import LNG in the first phase.
  • 5 million tonnes: The capacity of the terminal to import LNG by 2008.
  • 30 per cent: The foreign group's stake in the development of the terminal and associated pipeline distribution network.
  • 215 kilometres: The length of one of the pipeline lines.
  • 182 kilometres: The length of the second pipeline line.
  • US$250 million: The estimated cost of the second stage of the project.
  • 10 years: The timeframe for building the pipeline network.
  • 7 per cent: The forecast annual growth rate of the world trade in LNG over the next 10 years.
  • 8 per cent: The forecast annual growth rate of the world trade in LNG over the next 10 years.
  • 60 per cent: The growth of the trade in LNG since 1990.

Sources:

  • "CLP Power in bid for Shenzhen LNG terminal". Reuters.
  • "China's CNOOC to form joint venture with Hong Kong, Japanese and US firms for Shenzhen LNG terminal". Xinhua News Agency.
  • BP Amoco. "World LNG trade grows 60% since 1990".

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