China Seeks More Term Supply

12 January 2018:

China could sign more import contracts in the next few months with some of the contracts including conditions precedent tied to gas sales agreements for the regasified LNG, final investment decisions and the start of operations at receiving terminals.

Zhejiang Energy Gas Group, a unit of state-owned Zhejiang Provincial Energy Group (Zhenergy), issued a request for proposals (RFP) in November for 1 MMt/y for 20 years on a delivered basis starting sometime in 2021. Proposals are due from Dec. 13, 2017, to Jan. 15, 2018. Sellers must prove they have delivered more than 1 MMt/y over five years to Chinese terminals, limiting qualified sellers to existing suppliers to Chinese buyers. This shows Zhenergy’s preference for players that are familiar with China. Sellers must also show that they have sufficient volumes to underpin the 1 MMt/y of supply for 20 years.

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