Sinopec Starts Building LNG Project in Shandong     

Sinopec Group started building its first liquefied natural gas (LNG) project in Jiaonan, Qingdao, Shandong province on September 10th.
   The LNG project, based at Dongjiakou in Jiaonan city, comprises a receiving terminal, dock facilities and pipelines. It will be completed in two phases. The first phase, which will be able to handle 3 million t/a of LNG, includes three LNG storage tanks with a capacity of 160 000 m3 each, one berth able to dock LNG carriers with shipping capacity ranging from 80 000 to 270 000 m3 and receiving facilities, as well as 400 kilometers of gas pipelines with a designed capacity of 4 billion m3/a linking Dongjiakou with Boli, Jiaozhou and Laixi and linking Rizhao and Linyi. The construction size and operational timeframe for the second phase will be decided later in accordance with gas supply and marketing conditions.
   The first phase project will cost RMB9.66 billion. Construction will be completed in September 2013, with operation to start two months later.
   Sinopec has been actively implementing the "natural gas development" strategy in recent years by accelerating developments in gas exploration and production, pipeline construction and market expansion. Now it has five major gas production bases in Sichuan, Erdos, south of Songliao Basin, Tarim Basin and Bohai Bay. The company's total gas pipeline length is expected to reach 6 500 kilometers by the end of 2010, and its gas production will exceed 10 billion cubic meters. At present, Sinopec's gas pipeline network has exceeded 1 500 kilometers in Shandong province, to which the company supplies more than 2 billion cubic meters of gas per annual.
   The Sinopec Shandong LNG project will be supplied by ExxonMobil's Papua New Guinea project, under a deal signed last year in which Sinopec agreed to buy 2 million tons of LNG per year for a long term from ExxonMobil.
   This Shandong LNG project can replace coal consumption of 7.53 million tons per year when it starts up, experts estimated. That could translate to a reduction of 12.13 million tons of carbon dioxide emission.