LNG storage capacity up as new tanks built

China has completed construction of its largest domestic liquefied natural gas storage tanks, which industry analysts said would enhance the nation's natural gas storage capacity and ensure energy security.

China Petrochemical Corp, or Sinopec, said on Wednesday that it had finished construction of the LNG storage tanks with a total capacity of 270,000 metric tons in Qingdao, Shandong province in East China.

The tanks, developed independently by the company, are currently the largest in terms of capacity in the country and will significantly boost natural gas supply in the North China region, Sinopec said.

According to Sinopec, the LNG storage tanks will be put into operation by the end of this year, when the LNG terminal's annual unloading capacity will reach 11 million tons, and its annual gas supply capacity will increase to 16.5 billion cubic meters, capable of meeting the gas demand of 90 million households for one month.

The first and second phases of the Qingdao LNG receiving station were completed and put into operation in 2014 and 2021, respectively.

With an annual re-gasification capacity of 7 million tons currently, the receiving station has cumulatively unloaded over 41 million tons of imported LNG over the past few years, and supplies gas to provinces including Shandong, Jiangsu, Anhui, Hebei and Henan, it said.

The LNG tanks will further bolster natural gas storage capacity, though they are still short of the nation's target, and help meet peak-shaving and seasonal rebalancing demand in the country, said Li Ziyue, an analyst with BloombergNEF.

"China has been ramping up construction of LNG infrastructure in recent years, including receiving terminals and storage facilities, from expansion to new facilities, as the country prioritizes a transition away from coal," Li said. "The storage tanks have been playing a key role in enhancing domestic gas storage capacity to meet seasonal and regional rebalancing demand, considering that the country's gas storage capacity is still below the international average," she added.

Figures released by BloombergNEF show that the total tank capacity of the LNG receiving stations in China exceeded 13 million cubic meters by the end of last year, a 7 percent increase compared to the previous year.

Li said more LNG storage tanks should be built to satisfy an ever-growing appetite for gas across the country. This will also help provide valuable experience in the large-scale construction of LNG storage tanks in the future, she said.