Cost and risk factors of midstream storage and transportation of natural gas industry chain

Storage link

The main infrastructure of natural gas storage mainly includes gas storage, LNG receiving station, CNG gas storage station, etc. At present, the existing gas storage facilities in service in China have the characteristics of resource dependence and single management subject.

According to the plan, in the future, China will establish an emergency peaking infrastructure system based on underground gas storage and coastal LNG receiving stations, supplemented by intensive and large-scale LNG storage tanks in key inland areas.

I. Cost

1. Underground gas storage

The underground gas reservoir forms natural gas reservoir by injecting natural gas back into the underground space. The excess natural gas is stored in the off-season of gas supply and produced in the peak of gas consumption to supplement the shortage of gas supply network. At present, it is developing in the direction of integrating the functions of strategic reserve and emergency peak balancing.

The underground gas storage is positioned as a part of the transmission and distribution pipe network system, which plays a role in ensuring the security of supply, and the economic attribute is not obvious. Its investment subjects include upper and middle stream integrated enterprises, downstream urban fuel enterprises and consortiums. As the site selection and investment of underground gas storage are highly dependent on the upstream mining end, the construction and operation of upper and middle stream enterprises is the main mode. Before the "Twelfth Five-Year Plan", the main body of gas storage construction and operation was only CNPC. At present, there are 25 underground gas storage in China, of which 23 are operated by CNPC.

In terms of development costs, CNPC recently announced that it plans to build eight new gas storage tanks in the Sichuan and Chongqing region in three stages, with a total investment of more than 21 billion yuan, reflecting the high investment cost of underground gas storage infrastructure.

Because the gas storage business is not open to the outside world, it cannot operate independently, the degree of commercialization is low, the profit model is relatively simple, some projects need the support of financial subsidies, and there are 12 gas storage tanks in the country that are 100% supported by the state finance.

2. LNG receiving station

Coastal and inland LNG terminals accept LNG from LNG liquefaction plants, store and re-vaporize it for distribution to users. It is mainly composed of ship unloading system, LNG storage system, gasification/transportation system, evaporation gas treatment system, flare/vent system, metering system, water supply and drainage, sewage system, nitrogen system, air compressor station, fuel gas system, etc.

At present, the domestic and international LNG receiving station project process is relatively mature, the system is stable, from the project to the completion and production time is about 3 years, the design life is generally 25 years, the operation process also includes water, electricity and auxiliary materials, labor costs, depreciation, repair costs and other taxes, including the construction period of 3 years, including the after-tax investment recovery period of about 9 years.

According to the public information of the enterprise, the construction cost of the domestic LNG receiving station is calculated at 3 million tons/annual capacity, and the investment is about 6.6-7 billion yuan.

2. Risk factors

The growth of gas storage is slow. The peak load capacity of China's gas storage is weak, and the growth is expected to be relatively slow, which can not keep up with the rapid growth of consumer demand. At present, the domestic underground gas storage investment subject is single, the degree of commercialization is low, open market-oriented operation is the inevitable choice to accelerate its development, in the process of reflecting the cost of gas storage price is the key factor, at this stage, the relevant policies have not been issued, the policy space is not clear. In addition, another important factor restricting the large-scale growth of China's gas storage is that the development threshold is high, there are fewer suitable high-quality storage sites in China, the site selection and construction is difficult, the core equipment and technology of relevant independent property rights are missing, and the relatively mature underground gas storage development capacity is in the hands of a few enterprises.

Competition in the LNG business has intensified. With the rapid growth of consumption and imports, based on the bullish expectations of natural gas consumption and the support of relevant state departments for the construction of gas storage infrastructure, the market is generally optimistic about the LNG import storage and reception link. China gradually ushered in the construction boom of LNG receiving stations, and the main investors also showed a diversified trend.

Non-" three barrels of oil "enterprises, currently have approved project capacity of about 10 million tons/year, Xinjiang Guanghui, ENN Energy and so on; About 4-9 million tons/year are Huaying Petrochemical, Huadian Group, Pacific Oil and Gas, etc.; About 1 million to 3 million tons/year are Fujian Investment Group, Zhongtian Energy, Shenneng Group, Baota Petrochemical, Zheneng Group, Deep Burn Group, Guangdong Yuedian, Ningbo Power, Shenzhen Energy, Beijing Control, Chaozhou Huafeng, Nanshan Group, etc.; Within 1 million tons/year, there are Guangzhou Gas, Hebei Natural Gas, Jiangsu Guoxin, Guangye Investment, Jiufeng Energy, Dalian Construction Investment, Tianjin Gas, Hengrongda, Ying An Industrial, etc.

In addition, Hanas, Hebei Jinjianjia, Changlian Petroleum, Changfeng Energy, Shenghan Energy, Jingneng, GCL-Poly, Baichuan Energy, China Railway Gallen and other enterprises have LNG terminal construction plans, with a total proposed capacity of more than 48 million tons/year.

The influx of a large number of investment entities may cause the price of natural gas to rise in the procurement process. At present, the design and construction level of LNG terminal facilities tends to be mature, and with the rising price of raw materials, the space for operating costs to continue to decline is limited, and new operators are facing more tests.

Transport link

According to the different modes of transportation, the natural gas transportation link is mainly divided into pipe network and vehicle and ship two parts. The pipeline network is divided into import pipeline, long-distance pipeline network, provincial pipe network and municipal pipe network, etc. Transport vehicles and ships are mainly used for the transportation of liquefied natural gas LNG and compressed natural gas CNG.

I. Cost

1. Pipeline transportation

At present, China's main natural gas pipelines and regional pipe networks have realized interconnection, basically forming a "national network". From the perspective of the main operators, mainly manufacturers or importers for the purpose of sales set up pipeline companies to build and operate, and there are few third-party enterprises that simply operate pipeline transportation business. Among them, the main trunk lines such as long-distance pipelines are mainly dominated by the three major oil groups, and the regional and provincial pipe networks are mainly managed and guided by the local SASAC and other relevant departments.

The construction of natural gas pipeline network has huge investment and high entry conditions, which requires enterprises to have strong capital strength and anti-risk ability. As of December 31, 2016, the domestic operating mileage of more than 1,000 kilometers of pipeline companies, the total assets between 2.5 billion to more than 9 billion.

2. Vehicles and boats

Tankers and transport ships are mainly used for the transportation of natural gas such as LNG and CNG, which can be loaded and unloaded and moved. The inland LNG transport mode is mainly tanker transport, overseas LNG is transported to the port receiving station by ship, processed and gasification through the pipeline to the consumer end, or directly transported by the tanker. According to Shenwan Hongyuan research forecast, natural gas tanker and ship transport market is expected to exceed 50 billion yuan.

Most LNG tanker owners are self-established logistics companies by gas sellers, and there are also some third-party logistics service companies and individual-run tanker trucks in the market. At present, the LNG tankers used in China mainly include semi-trailer transport tankers and container tankers.

There are two main types of LNG carriers, including membrane cargo holds and spherical cargo holds, of which membrane cargo holds are dominant. The cost of transport vessels is high, taking 160,000-170,000 cubic meters of LNG carriers as an example, the cost of more than 200 million US dollars, and the related operation and maintenance costs are also high.

According to the research report of Drewry, a British maritime research consulting company, from January to September 2017, the average freight rate of global LNG carriers was 33,000 US dollars/day, and the transportation price also fluctuated with market supply and demand.

China's LNG imports used to rely on international ship capacity, but recently in addition to the domestic self-established LNG fleet has begun to take shape, domestic enterprises through the participation of international ship enterprises or self-built vessels to increase participation in the global LNG carrier business, is expected to gradually reduce the cost of imported natural gas transportation.

China's inland LNG water transport market has just started, and only two companies, CNOOC Energy and Zhejiang Huaxiang Shipping Co., LTD., have obtained the operating qualifications of LNG carriers in coastal and inland waters. There are also some enterprises that are optimistic about the inland water transport market are also actively layout, and it is expected that the small and medium-sized LNG carrier market will also usher in an investment boom.

2. Risk factors

The LNG logistics market has yet to mature. From the perspective of the industry, China's LNG logistics industry as a whole is in the initial stage, the market competition pattern needs to be optimized, the equipment manufacturing capacity of vehicles and ships needs to be cultivated, the management and operation experience of operating enterprises needs to be improved, and there is still a certain gap from large-scale professional development. Maritime transport ship independent manufacturing is rising, inland waterway transport is relatively blank, land vehicle transport is also carrying out transport mode innovation, equipment and business mode are facing upgrading. In addition, LNG transportation belongs to dangerous goods logistics, and safety risk prevention mechanisms need to be established.

Pipeline-transport pricing controls were strengthened. There is no unified standard for domestic natural gas pipeline transportation prices for the time being, basically in accordance with the "first-line, one-price" method, the pricing dominance is controlled in the hands of business enterprises, and the transportation costs are superimposed from the gas source to the main line to the provincial network to the terminal.

At present, the relevant competent authorities are gradually promoting the reform of the natural gas price mechanism.

In addition, according to the statistical results of Anxis research, the provincial natural gas pipeline transportation price is between 0.15 and 0.5 yuan /m3, and some provinces and regions are above 0.25 yuan /m3, and the price level is relatively high.

Some provinces and regions have successively introduced regulatory policies to strengthen anti-monopoly and cost restraint, comprehensively carry out pricing cost supervision and examination in key areas such as natural gas pipeline transportation, strictly check and validate, and carry out governance of illegal charging behaviors. It is expected that the price of pipe network transportation will fall, the gross profit will narrow, and it is necessary to develop a more reasonable and sustainable profit model.