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CNPC Is in Crisis Mode as Blackout Lames Central Asia Gas Supply to China
Liao Shumin
DATE:  Jan 09 2019
/ SOURCE:  yicai
CNPC Is in Crisis Mode as Blackout Lames Central Asia Gas Supply to China CNPC Is in Crisis Mode as Blackout Lames Central Asia Gas Supply to China

(Yicai Global) Jan. 9 -- Gas supplies to China from Central Asia have been cut once again during the peak heating season after being almost halved at the start of last year. 

Pipeline officials point to a power outage caused by aging infrastructure as the culprit.  

China National Petroleum has activated an emergency plan to transport more gas from South China to the North and raise liquified natural gas imports to supply the shortfall.

"China's gas reserves are limited and may only hold out for a few days. We may need to set an overall domestic gas supply limit if the shortage continues for a long time," a source familiar with the matter told state Jiemian News yesterday, adding, "We can only wait on the notice of recovery from the Central Asian side."

Turkmengaz State Concern, Turkmenistan's national gas company, suddenly reduced its gas shipment without telling CNPC, inducing a supply gap of about 35 million cubic meters per day, per the Jiemian report.

Turkmengaz's daily gas supply to China had been about 60 million cubic meters since the start of this winter's heating season, which runs from November to March. Its delivery was still 63 million cubic meters as of Jan. 6, according to the report.

CNPC's emergency plan uses imported liquefied natural gas -- A mix of methane and ethane liquefied for storage and transport that occupies 1/600th of the space of its gaseous form -- to supplement the pipeline shortfall, the source said.

"CNPC's emergency plan is expected to greatly impact domestic LNG prices," a person plying the LNG trade told Jiemian.

, rendering it easy to ship and store when pipeline transport is unavailable, public information shows.

"The official reason given by the Central Asians for the supply reduction is that the aging local power supply infrastructure sparked an unexpected power outage that shut down the natural gas compressor units," said an insider from Central Asia Natural Gas Pipeline, a CNPC unit.

The gas in the Central Asia pipeline mainly comes from Amu Darya River Gas, a Turkmen plant of CNPC, Turkmengaz State Concern, which is headquartered in the country's capital of Ashgabat, and Uztransgaz, based in the Uzbek capital, Tashkent.

Turkmenistan is China's largest exporter of pipeline natural gas. It sent 19.3 million tons in 2017, 85 percent of China's total pipeline natural gas imports during the same period, data from China's General Administration of Customs show.

The Central Asia–China gas pipeline runs from Central Asia to China's northwestern Xinjiang region, where it hooks up with China's domestic grid, enabling the fuel to travel the 7,000-odd kilometers from Turkmenistan to Shanghai, public information shows.

A virtually identical gas supply interruption also occurred at the beginning of last year. The Central Asia pipeline gas delivery was slashed by almost half from 120 million cubic meters to 70 billion cubic meters on last Jan. 30, CNPC announced the next day. 

Central Asian exporters failed to deliver the natural gas per contract, claiming a lack of money to repair broken gas transport equipment.

Editor: Ben Armour

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Keywords:   PetroChina,Natural Gas