Hunan's Changsha Brings Second LNG Storage Depot Online

Changsha ENN Gas Corp., the primary gas distributor for Changsha City in Hunan Province, has put its second liquefied natural gas (LNG) storage depot into operation after three months of pre-commission checks, the company said in a news bulletin issued on Monday.

Changsha ENN is the regional subsidiary of Hong Kong Stock Exchange-listed ENN Energy Holdings Ltd.

The RMB 260 million ($40.8 million) depot has a storage capacity of 12 million cubic meters (MMcm), enough to supply Changsha for approximately eight to 10 days, according to the bulletin. Construction of the facility began in July 2010.

The company's first Changsha LNG storage depot went online in January 2008. The facility has 200 thousand cubic meters of storage capacity, sufficient for only two to three days, state media Hunan Daily reported on Tuesday.

Changsha, the capital of Hunan, currently sources gas from China National Petroleum Corp.'s (CNPC) West-East Pipeline (WEP) network and the Zhongwu Gas Pipeline.

"CNPC supplied an average of two MMcm of gas per day (MMcm/d) to Changsha last year, roughly 0.9 MMcm/d short during the peak gas consumption period from last November through March," Zhuochuang Information analyst Li Lingxuan told Interfax on Tuesday.

Changsha's first LNG depot was not large enough to ensure against future gas shortfalls during peak consumptions periods, said Li, adding that the new storage facility will guard against shortages next winter.

Gas consumption during the winter peak consumption period last year topped 325 MMcm, according to a Changsha ENN bulletin published in March. Some 4.5 MMcm of last's winter gas supplies came in the form of stored LNG, the National Development and Reform Commission said in April.

Hunan is currently in the midst of constructing a comprehensive gas network that will eventually connect 57 cities and counties by the end of the 12th Five-Year Plan period, Interfax reported last week. As per an agreement signed by the Hunan government and CNPC in April 2010, CNPC will construct 30 pipelines totaling 1,600 kilometers by 2015 as part of a plan to boost the province's low rate of gas consumption.