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Commercial application of rising price to boost shale gas development

time2018/01/10

Since the end of 2017, the price of LNG has been soaring, which has made the gas market in the downturn hope for many years. On the other hand, the LNG commercial application of shale gas is also broken. SASAC website news, recently, Sinopec Fuling LNG plant device into the feed valve opened, marking the first shale gas LNG plant in the first phase of trial operation. This project has been known as a landmark for the commercialization of shale gas for many years.
Because of the high cost of shale gas mining in China, the progress of commercialization is not smooth. Under the background of shortage of natural gas and the rise of LNG price, the LNG plant of shale gas, as an important commercial channel, is coming into operation. It is considered to be a "dancing machine" in the process of shale gas commercialization. But the process is still facing many difficulties.
Trial operation of the first shale gas LNG plant
As the country's first shale gas LNG plant, LNG plant in Fuling, the project is jointly developed by Sinopec and Chongqing municipal government, design capacity of 3 million cubic meters / day, the annual output of about 1 billion 100 million cubic meters, with an annual output of LNG68 million tons, the construction in three phases, LNG after processing is mainly used in Chongqing, Guizhou and Hunan and other neighboring provinces gas station.
In fact, the Fuling LNG has been on the agenda in 2014 and started in September 2015, but the domestic gas market downturn seems to have affected the progress of the project. The tender information of China's Natural Gas Industry Federation at the end of 2015 shows that the construction registration of the project belongs to the medium standard of the industry. The funds are in place, indicating that the construction is under construction. The construction is expected to start in 2015, and the estimated deadline is 2016. In August 2016, the Sinopec official network showed that the total investment of the LNG plant project in Fuling was 145 million yuan, and the total process was over half.
It is worth noting that according to WWW statistics, in 2016 the domestic LNG factory operating rate fell to historic lows. In 2016, the average weekly commencement rate of China's LNG factory was 37%, which fell 5% again after the fall of 7% in 2015. In 2017, the price of LNG in winter increased sharply, which seemed to stimulate the construction and production of the domestic shale gas commercialization project.
Data from Yulin coal trading center show that in December 28, 2017, most liquefied gas plants in Shaanxi, Inner Mongolia, Hebei, Henan, Shandong and Jiangsu had reduced the LNG price to 5000 yuan to 6000 yuan / ton. Even a big drop, it is still a lot higher than the price of LNG3000 yuan / tonne in 2016.
The Fuling shale gas field, which belongs to the Fuling LNG factory, is the largest shale gas field in China, and has become an important gas source in China. However, a senior oil and gas analyst who doesn't want to be named thinks that Fuling shale gas LNG has great significance for Sinopec. Sinopec can realize diversification of shale gas sales channels, but it is hard to become a sign of commercialization of shale gas industry in China. In order to realize the commercial application of shale gas, the amount of gas production needs to be reached to a certain scale.
The industrialization of shale gas in China is bumpy
The shale gas industry in China has entered a high period in 2011~2013, and the Ministry of land and resources has held two bidding for shale gas successively. Among them, after the introduction of the second tenders to civil capital, the capital market has aroused strong concern.
However, in 2013, the expected third tenders have not been launched, since then, the shale gas bid "frozen". During this period, "two barrels of oil" racing shale gas production and constantly upgrading the scale of production, China has become the first country to realize shale gas business development outside North America.
Under the guidance of "two barrels of oil", the domestic shale gas LNG began to develop, and Sichuan and Chongqing was a breakthrough point. In 2015, the Fuling LNG project was on the agenda, in Yibin, Sichuan, already in use by the LNG plant. In January 2015, LNG shale gas liquefaction plant in Sichuan Sentai energy company (hereinafter referred to as Sentai energy) 70 thousand cubic meters / day chemical plant project officially entered the operational phase of the project, the two phase project of Junlian 300 thousand cubic meters / day shale gas liquefaction plant month officially started construction.
The project is located in Sichuan city of Yibin province Junlian County mu'ai Town, is Junlian County Sentai energy and Yibin municipal government in the Zhejiang oil field under the support of shale gas utilization project, gas source for the local Junlian shale gas resources. Data show that in 2014, daily gas production of shale gas in Junlian area is about 100 thousand cubic meters, 12 thousand cubic meters in Junlian area to ensure gas demand situation, the remaining shale gas through the LNG factory liquefied form foreign sales, to Sichuan province to ease the tense situation of gas source of introspection. From the point of view of production, the volume of Junlian county is far less than the LNG project in Fuling.