China’s privately-owned energy firm GCL Oil & Natural Gas has signed a framework agreement with Royal Dutch Shell to explore the supply and trade of LNG in eastern China.
GCL plans to form a liquefied natural gas (LNG) joint venture with Shell, according to Reuters.
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The joint venture would secure LNG from Shell and market the furl to a receiving terminal, which GCL is planning in China’s Jiangsu province.
The 6.5 million tonnes per annum (Mtpa) terminal is one of the three terminals GCL is planning to build along the east coast of China. These projects will be designed to have a combined capacity of 14.5Mtpa.
Citing GCL’s strategic planning official Huang Shaohua, Reuters stated that the 5Mtpa Yantai project was first among these projects to have won state regulatory approval in January.
GCL expects to start construction on the facility this year.
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By GlobalDataAccording to Reuters, the Yantai terminal has an estimated cost of $1.1bn. It is expected to be operational in 2023.
Neither of the companies disclosed further details of the deal.
The oil and gas industry in China is majorly dominated by state-owned firms, including Sinopec, PetroChina, CNPC and CNOOC.
Last month, Shell decided to exit the proposed Lake Charles liquefied natural gas (LNG) export terminal development in Louisiana, citing the crash in oil prices due to the coronavirus pandemic.
In February this year, Shell unit Equilon Enterprises concluded the $1.2bn divestment of the Martinez Refinery in California to PBF Energy subsidiary PBF Holding on behalf of Shell Oil Products US.
