PetroChina Hikes Trucked LNG Prices at Rudong

PetroChina Co. Ltd. has hiked trucked liquefied natural gas (LNG) prices at its Rudong import terminal under pressure from the surging cost of imported LNG from Qatar, an energy consultancy told Interfax on Thursday.

PetroChina raised prices at the terminal in Jiangsu Province by 24.3 percent to RMB 6,168 ($968.83) per ton (t) from RMB 4,935/t ($775.16) in June, according to analyst Li Lingxuan from Zhuochuang Information.

PetroChina secured a 25-year offtake agreement with the Qatargas 4 project in 2008 for three million tons per annum, which will mainly supply the Rudong terminal. Qatargas is the largest LNG producer in the world and supplies around one quarter of all global LNG. The company prices its cargoes against global oil prices, which have been high for most of this year.

The price increase will help narrow PetroChina's losses from sales of trucked LNG at Rudong, Li said. The terminal lost an average of RMB 1,418 ($222.8) on every ton of trucked LNG sold in May, according to data from Zhuochuang Information.

Li added, however, that there is speculation that the National Development and Reform Commission (NDRC) will raise the ex-works price of gas from PetroChina's West-East Gas Pipeline (WEP) network and other onshore gas sources this month. Such a move may boost Rudong's overall earnings and PetroChina's confidence in the facility, Li said. The NDRC last hiked ex-works prices in June 2010.

China's LNG import bill from Qatar has ballooned this year. The value of Qatari cargoes in May was up 28 percent year-on-year to $19.3 per million British thermal units (MMBtu) - the highest of China's four term supply contracts. Australian shipments were cheapest in May at $3.35/MMBtu, while cargoes from Malaysia and Indonesia weighed in at $7.93/MMBtu and $4.40/MMBtu, respectively, figures from the General Administration of Customs show.

The impact of costlier Qatari LNG has also been felt at PetroChina's terminal at the port city of Dalian in Liaoning Province, which lost an average of RMB 953/t ($149.7) in May. Li forecast PetroChina to raise trucked LNG prices at Dalian by 11.6 percent to RMB 6,020/t ($945.61) in July.

By comparison, the country's leading LNG importer China National Offshore Oil Corp. has maintained profitable sales of trucked LNG. The company's Dapeng terminal in Guangdong Province generated a profit of RMB 4,378/t ($687.8) in May, while the Putian terminal in Fujian Province earned RMB 3,951/t ($620.7). Dapeng and Putian receive Australian and Indonesian LNG, respectively.

Rudong became PetroChina's first operational LNG receiving terminal when it officially went online in November 2011. The facility was an important source of gas for the WEP network during a period of peak consumption lasting from Nov. 15 to March 15 this year.

Rudong supplied an average of 18 million cubic meters per day (MMcm/d) to WEP over the four-month period, up from 3.3 MMcm/d before Nov. 15, according to Zhuochuang Information. Rudong's supply peaked at 28.3 MMcm/d in Dec. 14-16, equivalent to one-third of the record 72.12 MMcm/d supply that WEP has achieved to date.