Friday, March 19, 2010

China Building LNG Facilities

Chinese energy giant PetroChina is building four major new LNG facilities along the country's eastern shore, two of which are under construction. What makes this a very interesting development is that the facilities are being built without corresponding supplier contracts. 

The move seems to indicate that PetroChina believes it will be able to procure significant quantities of natural gas on the spot market rather than have to sign up to long-term, expensive supply contracts.  It also means that PC is making a big bet on gas.  This is yet another sign of the importance of natural gas for China's future.  China has been working all the angles to develop gas import capacity, be it through pipelines or LNG facilities. It has also been active in developing its own resources through offshore and shale gas exploration. 

We often hear factoids like, "China is building a new coal plant every week" to suggest that we in the "developed nations" need not worry about our own greenhouse gas emissions (and pollution) until China limits its own emissions.  But all of a sudden China seems to recognize the many benefits of natural gas and might be making real strides to limit its greenhouse gas emissions while simultanously maintaining its economic growth.  I wouldn't be surprised to see China implement a progressive energy policy in the near term while we in the U.S. are still sitting on the sidelines bickering. 

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