Delays, cancellations at China's LNG terminals as Tianjin blast prompts safety overhaul

2015-10-16

Tianjin blast LNG cancellation delay

China's LNG terminals are experiencing delivery delays and cancellations after the introduction of strict port safety measures following the August 12 Tianjin blasts, trading sources said Thursday.

The accident, caused by two explosions at a warehouse storing dangerous and chemical goods, had an immediate impact on gas consumption in the industrial port area of Tianjin, in northern China.

Investigations into the causes of the accident are still ongoing, but strict country-wide port safety measures have already been introduced, causing delays and cancellations of LNG deliveries.

"Port authorities in China are very sensitive about every potential risk, so they have ordered strict safety requirements," an LNG importer said.

"Normal operations have not officially resumed for all the terminals."

A second importer added: "The investigation is still ongoing and the government is very cautious."

One of the terminals affected by the accident and the new regulation is the 3 million mt/year Shandong LNG terminal at Qingdao, state-owned Sinopec's only LNG import facility.

So far, a long-term delivery from the Exxon Mobil-operated Papua New Guinea LNG (PNG LNG) export plant to Shandong has been canceled, a source close to the buyer said. PNG LNG sold this cargo through one of the three tenders issued by the export company in September.

Sinopec last took an LNG cargo September 2 aboard the LNG carrier Southern Cross and is awaiting the delivery of the Papua, which is idled off the Shandong terminal.

Elsewhere in China, LNG imports have also decreased. According to General Administration of Customs data, LNG imports into China in August were 1.41 million mt, down by 10.8% on the year and 26.6% on the month.

Traditionally, August constitutes part of the peak summer demand season in China, but the import figure is the lowest for the month since 2012.

Source from : Platts

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