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China Market Insider CNOOC Builds its Own Jumbo LNG Storage

From Henrik Bork* |

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Chinese engineers have mastered the technically demanding construction of a jumbo LNG tank for the first time. The oil company CNOOC has completed four liquid gas storage facilities, each with a capacity of 220,000 cubic meters, the Chinese newspaper ‘Global Times’ reported. Until now, storage facilities of this size were always imported into China, from Japan and South Korea.

With the format ‘China Market Insider’, PROCESS Worldwide regularly reports on the Chinese chemical and pharmaceutical market.
With the format ‘China Market Insider’, PROCESS Worldwide regularly reports on the Chinese chemical and pharmaceutical market.
(Source: ©sezerozger - stock.adobe.com)

Beijing/China – The technological breakthrough comes at a time when China is strongly pushing the use of liquefied petroleum gas for reasons of energy security and to achieve climate protection goals. LNG is difficult to store because the liquefied gas has to be cooled to minus 162 degrees Celsius. Such temperatures put the steel used in construction under high pressure. It becomes easily brittle. Steel with a nickel content of 9 % has to be used, and the demands on the design and safety concept of the storage facilities are also high.

The four new jumbo storage facilities of CNOOC, China's largest producer of offshore oil are part of the Group's Rudong project located in the town of Yancheng in the Chinese coastal province of Jiangsu. According to Global Times, the design and construction of this LNG storage facility which is the largest in China has been managed by CNOOC without foreign assistance. However, the successful ‘roofing’ of the storage facilities is only the ‘prelude’ to the Chinese development towards more and more ‘super-sized LGN storage tanks’, the paper writes.

CNOOC's 220,000 cubic meter tanks are 60.7 meters high and have an internal tank diameter of 86 meters. It is the first time that a Chinese design team has been able to build tanks “with such a span, low horizontal rigidity and complex, natural vibration modes," noted the newspaper's reporters with pride.

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China began importing LNG in 2006. Today it is the world's second largest importer of liquefied natural gas after Japan. The 22 LNG terminals in the People's Republic can currently handle up to 90 million tonnes of LNG annually. In 2019, according to official statistics, China has imported 96.56 million tonnes of natural gas, including 60.35 million tonnes of LNG.

Now more than 20 new LNG terminals are under construction. When they are completed, in 2023, the total storage capacity in China will increase to 143 million tonnes per year, the consulting firm JLC estimates. According to an analysis by the ‘Shanghai Petroleum and Gas Exchange’, the trend towards larger storage facilities i.e. 220,000 to 270,000 cubic meters, is therefore clearly pre-programmed.

China's central planning authority NDRC published a document on ‘Accelerating the construction of natural gas storage facilities’ in April this year. In this document, larger storage facilities are explicitly described as desirable. And since oil and gas prices have fallen worldwide in the wake of the corona crisis, the construction of ever larger natural gas tanks for the central office in Beijing has once again taken on a new urgency, say Chinese market experts.

CNOOC also sees its latest design success merely as a milestone on the way to higher goals. The company will be the next to design the "world's largest LNG storage facility with 270,000 cubic meters," Wang Dongjin, the oil company's CEO told news portal Pengpai Xinwen.

* Henrik Bork, long-standing China correspondent of the German newspapers 'Süddeutsche Zeitung' and 'Frankfurter Rundschau', is Managing Director at Asia Waypoint, a consulting agency specializing in China and based in Beijing. "China Market Insider" is a joint project of Vogel Communications Group, Würzburg/Germany, and Jigong Vogel Media Advertising in Beijing/China

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