PetroChina plans to substantially increase gas source price increase or exceed 100%

The person close to the CNPC Group told reporters on July 25, 2013 that CNPC issued a document requesting that the gas supply prices of LNG plants in various regions be raised to the highest prices for non-residential consumers.

At present, more than 70% of the gas resources of LNG plants in China have been imported from PetroChina. According to the calculation of Anxis's interest rate, according to the above pricing plan of PetroChina, the LNG production enterprises will increase the cost of single feed gas by about RMB 1/contract. Yuan/ton, the price increase is larger. The person in charge of an LNG plant in the northwest region also confirmed the above information to this reporter. The responsible person said: “This price increase rate can't be completely accepted. If so much goes up, the entire LNG downstream market will die.”

The CNG's LNG receiving station has also faced pressure from rising prices of imported LNG from abroad. Under the influence of internal and external attacks, the ex-factory price of LNG in various places will be likely to trigger a price increase in August in order to absorb the pressure of rising costs.

LNG sharply adjusts prices

The National Development and Reform Commission issued a notice on June 28 for non-residential natural gas price reforms to increase the stock gas and incremental gas prices for industrial gas in various regions. However, at the same time, regulations governing the release of LNG gas source prices are negotiated between supply and demand sides.

The reporter learned from various sources that PetroChina has recently issued a notice to plan to implement the gas prices of LNG plants supplied by CNPC to implement the prices of the highest price for the local stations for incremental gas, and PetroChina’s internal companies will be in place first. However, at present, the vast majority of LNG manufacturers have not yet received a formal price adjustment notice.

“I saw this notice, but we think this price increase method is not at all operable.” The person in charge of a LNG processing plant in a certain northwest region of PetroChina told this reporter: “We and the local development and reform commission and other related departments are working hard and The upstream oil companies in China coordinate the price adjustment and strive to reduce the price adjustment."

The responsible person calculated an account with the reporter. If the above price adjustment plan of PetroChina is implemented, the LNG feed gas obtained by his factory will reach 2.48 yuan/party, while the price of LNG feed gas he obtains at present is only 1.2 yuan/party. The increase was more than 100%. If this price is sold on the basis of LNG refueling stations, "Either we lose money or people no longer use LNG heavy trucks."

According to our reporter’s understanding, the LNG plant in Sichuan Province that used PetroChina as a source of gas also received verbal notifications of price adjustments. According to the calculations of Anxis Energy, according to CNPC’s price increase plan, the raw gas price of the Sichuan LNG plant will reach 2.79 yuan/square if the local non-residential highest gate price is implemented, and the cost will soar by around 0.79 yuan/square.

“We also understand the difficulties of upstream companies. Now that the downstream LNG market is developing too fast, many places are heading into the market. If prices do not increase, the supply will certainly not be enough.” said the person in charge of the above-mentioned CNPC LNG plant, “but the upstream gas supply companies once The rate of price increase is too great, and an increase of around 20% is still acceptable. Now we need to raise the price by 100% at a stroke, which will kill the already-built LNG plants and downstream gas stations.”

The report released by Enxis Prosperity Energy pointed out that once the price of raw gas supplied by CNPC increases, the cost pressure on LNG manufacturers will increase dramatically, and their ex-factory price will also increase significantly. Users with lower capacity may gradually fade out of the market.

CNOOC Receiving Station May Or Increase Price

Another part of the domestic LNG market - the receiving station for imported LNG also faces the same cost pressures. Shenzhen Dapeng and CNOOC Putian Terminals under CNOOC are likely to take the lead in early August.

After nearly two months of negotiation, the price of LNG supplied by Indonesia to CNOOC Fujian Putian Terminal has finally been determined to rise to around US$7 per million British thermal units, an increase of more than 70%. Another market news said that Australia and Qatar are also brewing LNG prices for export to China.

Wang Ruiqi, an energy analyst at Axis Prosperity Energy, analyzed with the reporter that the current import LNG price increase has not yet been implemented, but at the moment, the inventory of LNG receiving stations is already very low, and compared with inland LNG plant gas, the LNG of the current receiving station is more With advantages, it is expected that Shenzhen Dapeng and Putian, Fujian Province will substantially increase the ex-factory price of LNG in August, and the increase may be above 600 yuan/ton, which means an increase of more than 10%.

If domestic gas and imported LNG both increase prices, the domestic LNG downstream market will face a “shuffle”. A LNG downstream market person in North China stated that some of the LNG refueling stations currently under construction have been suspended. At the same time, some LNG refueling stations in operation are also low-profit and even cost-inverted.

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