Buyers shy away from CNOOC's costly Qatar natural gas

China National Offshore Oil Corporation (CNOOC) has been struggling to find end-users for liquefied natural gas (LNG) to be imported from Qatar because of high import costs, according to reports.

The leading LNG importer is scheduled to begin shipping the clean fuel in September under a 2-million-tons-per-year supply deal.

Most downstream buyers had only signed intention agreements rather than formal contracts with the leading Chinese LNG importer, Xinhua News Agency reported in a biweekly newsletter.

The LNG, which was priced in accordance with the Japanese Crude Cocktail, a benchmark for setting LNG prices for Japanese buyers, was estimated to arrive at Chinese terminal Dapeng at around 3 yuan (44 cents) per cubic meter, the report said.

The price would be almost twice as expensive as existing supplies from Australia and would leave minimal margins for city gas distributors and gas-fired power generators.

The Chinese gas distributors and gas-fired power generators face government-set gas retail prices and fixed power tariffs respectively.

CNOOC declined to give details about domestic sales of Qatar LNG, Xinhua said.
Calls to CNOOC were not immediately answered.
 

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