China's Guangzhou Gas newly built 1 million mt/year Nansha LNG terminal has kicked off its operations under phase 1 after receiving the first cargo Aug. 8, an official with the company told S&P Global Commodity Insights Aug. 9.

The LNG carrier MARAN GAS CORONIS carrying 142,889 cu m, or about 63,000 mt, of LNG arrived at Guangzhou Gas' Nansha LNG terminal Aug. 8, S&P Global Commodities at Sea showed.

Located in Guangzhou city on China's southern coast, the Nansha terminal is the third one to be put into operation in China in 2023 and the 27th LNG receiving terminal in the country.

Guangzhou Gas was originally planned to start the operations of the Nansha LNG terminal in end-June. However, its startup was delayed due to some government formalities, the company official said.

The LNG cargo for commissioning was supplied by state-owned Sinochem, one of China's four largest state-owned oil companies, according to the company official.

Prior to this, two companies had also started operations at their LNG terminals. This included Zhejiang Energy Group's new 3 million mt/year Wenzhou LNG terminal in eastern Wenzhou city Aug. 7 and Suntien Green Energy's 5 million mt/year Caofeidian LNG terminal phase 1 in northern Tangshan city June 18, S&P Global reported earlier.

The parent company of Guangzhou Gas -- Guangzhou Development Group, a provincial government-owned power and natural gas supplier -- in March 2022 signed a 10-year contract to buy 400,000 mt/year of LNG from Sinochem for delivery from 2023 to 2032, S&P Global reported previously.

Sinochem in November 2021 signed a 17.5-year deal with US Cheniere for buying as much as 1.8 million mt/year of LNG, with delivery starting from July 2022 onward.

Construction plans

As an emergency peak-shaving reserve project, the Guangzhou Gas' Nansha LNG terminal is a key construction venture in the energy planning of the 13th Five-Year Plan and the 14th Five-Year Plan of Guangdong Province and Guangzhou city, respectively.

The project will be constructed in two phases. In its first paste project, Guangzhou Gas will enable the terminal to have an LNG storage capacity of 320,000 cu m, meeting the natural gas emergency needs of Guangzhou for 10 days. Additionally, the completion of the second phase will enable the terminal to achieve an emergency LNG storage capacity of 640,000 cu m, meeting the natural gas emergency needs of the city for 15 days, Department of Emergency Management of Guangdong Province, or DEMGP, said earlier.

The Guangzhou LNG emergency peak-shaving project under phase 1 is currently designed to handle 1 million mt/year of LNG, comprising two LNG storage tanks of 160,000 cu m each, and a dock capable of berthing 30,000-147,000 cu m LNG ships. The phase 2 will add two more LNG storage tanks of 160,000 cu m each, which are currently in preliminary design, according to DEMGP.

Guangzhou Gas, which distributes natural gas through pipelines and trucks, is the largest gas supplier and city gas pipeline operator in Guangzhou.

Guangzhou Development deals

Apart from signing a term contract with Sinochem, Guangzhou Development in April 2022 signed an LNG sale and purchase agreement with Mexico Pacific to buy 2 million mt/year of LNG from Mexico Pacific LNG Markets Pte. Ltd. for a 20-year period. LNG deliveries under the contract will start when commercial operations officially begin at Mexico Pacific's LNG export project, S&P Global reported previously.

Guangzhou Development had also earlier signed a SPA with international oil company BP for buying 650,000 mt/year of LNG for the 2022-34 period and natural gas sales agreements with some city gas companies in the Hong Kong-Macao Greater Bay Area to supply long-term gas volumes to city gas companies.

Guangzhou Development is one of the major power suppliers in Guangdong province, which is one of the most heavily industrialized regions in China. It is the largest power supplier in its capital Guangzhou city, operating with 12 power plants, which have a total installed capacity of about 4.05 GW, according to the company's website.

Source: Platts