CNOOC Completed Tender on Medium-Term Contract for 40 Shipments

According to sources, CNOOC Gas & Power, China’s largest LNG importer, recently invited bids for its medium-term contract for 40 shipments of LNG from 2018 to 2022. The call was sent out in April and closed in early May, and several suppliers won the bid allegedly, including BP, to deliver 2 cargoes per month from January to next year’s February in the next five winter heating seasons from 2018 to 2022. The contact was heard on a DES term, and the actual price will depend on the market condition.

Usually, CNOOC orders around 1 million tons of LNG for the extra winter supply for China’s winter heating season, and CNOOC usually swept spot cargoes in the international market in the previous years. The five-year contract is a new trying for CNOOC between the long-term contracts and the spot deals, helping the company absorbing more resources to prevent the winter shortage in advance.

In addition, it is heard that Guangdong Yudean Group, Guangzhou Gas Group and Shenzhen Gas Group also intend to invite the same kind of tender for winter heating season delivery. Those three companies all have shares in CNOOC’s Dapeng Terminal, and rumor says that CNOOC may pick this terminal as the demonstration pilot site for the third-party cooperation on LNG imports. Therefore, shareholders of the terminal will get a natural advantage in window time competition. Besides, Shenzhen Gas’s new terminal will be put into operation before the winter heating season allegedly, giving more opportunities to those second-tier gas companies.