CNPC to Raise Winter Contractual PNG Price

CNPC to Raise Winter Contractual PNG Price

From August, CNPC has started the contract signing with end users on the piped natural gas (PNG) winter supply from November 2018 to March 2019, and the contractual price was raised vividly by CNPC, China’s major pipeline operator and one of the three NOCs.

According to CNPC’s statement, the winter price principle was divided into direct-supply users (gas power plants and industrial users) and city gas companies. Herein, direct-supply users’ contracted price was adjusted to 22.7% higher than the provincial hub benchmark price, whilst city gas companies’ contracted price was comprised by two parts, the basic quantity and peak-shaving quantity.

The basic quantity was defined as “the winter contracted quantity - the peak-shaving quantity”, and the peak-shaving quantity was defined as “the winter contracted quantity - (annual contracted quantity/365/1.08*days of the month). The residential-use basic quantity’s price was fixed to the provincial hub benchmark price, and the non-residential-use basic quantity’s price was raised by 20% (conventional gas and imported PNG) or 27.06%-40% (imported LNG, unconventional gas such as shale gas, CBM, CTG, etc.) from the provincial hub benchmark price.

The peak-shaving quantity’s price policies were different by CNPC’s sales companies. CNPC’s natural gas sales company of Eastern China used bidding price of SHPGX as benchmark, that of Southwest China used 1.37 times of the provincial hub benchmark price, and that of South China used 1.4 times of the provincial hub benchmark price.

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