Sinopec's gas storage start-up set to increase China's gas, LNG supply

China's state-owned Sinopec has started sending natural gas imported from its Tianjin LNG terminal to the newly built Wen 23 underground gas storage in Puyang, northern Henan province, through its Ordos-Anping-Cangzhou gas pipeline, the company said on its website Tuesday. 

The 10.4-Bcm gas storage facility, the largest in China's central and eastern regions, is set to boost Sinopec's gas supply optionality and flexibility in northeast China, a key LNG consumption center and driver of fundamentals and spot prices in the wider Asian LNG markets. 
The project is one of several underground gas storage facilities due to start up in coming years to meet s growing Chinese consumption. 

Gas is normally injected into underground storage during offseason, and is then pumped out to meet demand during the peak winter season. China generally uses depleted or abandoned gas fields and reservoirs to build underground storage as they are more effective and economical compared with spherical tanks above ground. 

The Wen 23 gas storage, a central pillar of China's 13th Five Year Plan, was rebuilt from an exhausted gas field and put into operations in March this year. 

Apart from connecting to the Ordos-Anping-Cangzhou gas pipeline, the Wen 23 gas storage has also been connected to Sinopec's Yulin-Jinan and Puyang-Kaifeng gas pipelines in northern China, Sinopec said. 

Sinopec's Tianjin LNG terminal, which started commercial operations in April 2018, has an annual transfer capacity of 3 million mt and is capable of supplying around 4 Bcm/year of gas to the Chinese market. 

The terminal is connected to Sinopec's Ordos-Anping-Cangzhou natural gas pipeline as well as the company's natural gas storage facilities in northern China and supplies natural gas to the Beijing-Tianjin-Hebei-Shandong regions, the company said. 

The first phase Ordos-Anping-Cangzhou gas pipeline, which was put into operations on November 2018, has so far supplied more than 1.48 Bcm of natural gas to the northern regions from the Tianjin LNG terminal, Sinopec said. 

Sinopec's Ordos-Anping-Cangzhou gas pipeline has a transportation capacity of 7 Bcm/year and connects eight cities and 23 counties in the provinces of Hebei and Henan. 

The pipeline, which includes one trunk line and five branch lines with total length of 2,293 km (1,422 miles), is designed to transport 30 Bcm/year of natural gas.