Gas Pipeline to China's First Major Independent LNG Terminal Complete

SINGAPORE/BEIJING (Reuters) — A delayed sub-sea pipeline connecting a terminal owned by private Chinese gas distributor ENN Group and a provincial gas grid has been completed, paving the way for more imports into China's first major independent LNG terminal. 

The $848 million import facility located on Zhoushan Island in eastern China's Zhejiang province started operations in 2018 but the delay in the pipeline's launch, meant to take place last year, has limited its use.

An ENN official on Tuesday confirmed its completion.

Gas has started to flow through the pipeline in small volumes, a source familiar with the matter said, asking not to be named.

State-owned Zhejiang Energy Group said last week that the 81-kilometer (50-mile) pipeline will start from ENN's three million tonnes per annum (mtpa) Zhoushan terminal and will pass through islands, terminating at Zhenhai in Ningbo.

It will have a total transmission capacity of 8 billion cubic meters (bcm) per annum and will connect to Hang Yong Line's provincial pipeline.

The pipeline's completion will provide Zhejiang's provincial pipeline with its eighth gas source and improve gas supply capacity in the region, Zhejiang Energy Group said in a statement.

ENN's Zhoushan terminal is expected to be expanded to 5 mtpa in the first half of 2021.

ENN has signed long-term sales and purchase agreements with Chevron Corp and Australia's Origin Energy and also has an agreement to buy LNG from Total.

It has resold some of those cargoes because of the lack of the pipeline and land-based access to markets, several traders familiar with the market have said on condition of anonymity.

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