Cnooc Parent, BP Seek Customers for China's First LNG Terminal

China National Offshore Oil Corp., the nation's largest offshore oil explorer, and partner BP Plc are seeking additional customers for their liquefied natural gas terminal in southern China.

"The facilities are operating at less than 50 percent utilization and ready to support further new and existing customer growth," Tomas M. King, president of Guangdong Dapeng LNG Co., the nation's first LNG import terminal, said in an e- mailed statement today.

The $900 million terminal in Guangdong province has a 25- year contract with Australia's North West Shelf project to receive about 3.7 million tons of LNG a year. China National Offshore owns a 33 percent stake in the terminal and BP has 30 percent. The plant's customers own the rest.

The terminal has received more than 45 LNG cargoes, a higher total than the original plan, since it started operating in May 2006, King said.

The terminal operators bought three spot Nigerian cargoes because domestic demand has outpaced contractual supplies from Australia, an official at the venture said yesterday, asking not to be identified because of company policy.

China National Offshore and BP are adding units at the Dapeng terminal to expand capacity in order to meet rising demand, Upstream reported today, citing BP China Holdings' senior vice president L.C. Hicks. They will install two extra open rack vaporizers, equipment that converts LNG into a gaseous state, by the end of next year, the newspaper said.

The project partners installed a third LNG tank earlier this month, expanding the terminal's storage capacity to 480,000 cubic meters from 320,000 cubic meters previously, they said in today's statement.

China, the world's largest energy user after the U.S., aims to expand the share of energy produced from gas to 5.3 percent by 2010 from 3 percent now to cut reliance on oil and coal. Chinese oil companies are planning for more than 10 LNG receiving terminals along the nation's eastern and northern coasts.

LNG is natural gas that has been chilled to liquid form, reducing it to one-six-hundredth of its original volume at minus 161 degrees Celsius (minus 259 Fahrenheit), for transportation by ship to destinations not connected by pipeline. On arrival, it is turned back into gas for distribution to power plants, factories and households.