Sinopec Qingdao Terminal Phase II in Early Preparation

According to sources, Sinopec’s Qingdao LNG receiving terminal, located in Dongjiakou Port, is preparing for the Phase II construction to add two new 160,000 cbm tanks to the site, expanding the receiving capacity from the current 3 Mtpa to 7 Mtpa.

In the past four years right after the initiation of the terminal in 2014, the operator Sinopec Qingdao LNG Co., Ltd. has exerted great effort on the expansion preparation. Up to now, all 15 governmental approvals have been completed, and the expansion has just been approved by NDRC’s Shandong subsidiary as the last step of the preparation. It is believed the company will apply the FID request to its mother company Sinopec soon, and the construction is probably to start in 2018 and complete by 2020.

As one of the key areas in the coal-to-gas reform, Shandong Province has suffered from the shortage of LNG supply for a long time. There are over ten LNG reliquefaction plants in Shandong, but only Zaozhuang Xueneng Natural Gas Co., Ltd. maintained normal operation, because of the high PNG cost and low import price. Currently, in the off-peak season, the LNG supply of Shandong mostly came from Sinopec Qingdao Terminal and the two terminals in Tianjin. Some cargoes came from Xuzhou Dongxing Energy, but the volume was limited. However, in the peak season, Shandong will become the major buyer of LNG availability in North China and the booster of the price peaks in winters. Therefore, the expansion will help this region to gain more supply, at least before the other neighboring terminals in planning, such as in Yantai, Weihai, Dongying and Rizhao within Shandong or Ganyu and Yancheng in Jiangsu, come into reality from the blueprints.