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New Ideas of Market Planning for LNC Project in China
New Ideas of Market Planning for LNC Project in China

In China, these five LNG downstream markets are not only extremely broad, but also have the potential of hundreds of millions of tons per year, and are capable of withstanding the price of LNG international market. That's not surprising. In fact, in the distribution of the world's natural gas downstream market, it is generally the power generation and the city's civilian population of one quarter, and the industrial and urban industrial and commercial users account for the other half. However, when China imports large quantities of LNG, it can not catch up with the price increase, so it can not rely mainly on generating electricity to digest most of the earlier gas.

How to implement the five principles of natural gas substitution, instead of traditional LNG generation and urban gas planning?

Obviously, apart from the first alternative city LPG gas market, the other four are new and need to be explored. Isn't it new to work with every LNG gas plant to build several million kilowatts of combined cycle power plants? But only a few stations, and industrial (parks) and urban DES / CCHP, petrochemical industry, fuel substitution, LNGV industry chain development, involving many enterprises, many projects new or transformation only. The crux of the problem is that the development of these new downstream market users can not be synchronized and completed within 3-5 years from the planning and signing of the LNG acceptance station to the completion of the project.

On this issue, you must see the "Chinese characteristics" here. 1. China has a large population, a densely populated area and a rising standard of living. It is suitable for the development of large-scale urban DES/CCHP; The rapid development of industry and the growing economic strength have been capable of upgrading; 2. China is entering a new stage of development, industrial structure adjustment/transfer, industrial park, rural urbanization, the implementation of the scientific outlook on development, reversing the development model of "three high and one low", vigorously improving the environment and so on, it is a great historic opportunity to implement the energy-saving energy economy, including DES/CCHP. 3. The past three decades have shown that one of the characteristics of China's socialist market economy is the ability to organize powerful social forces, it will take years of slow progress to complete the traditional market economy in a relatively short period of time.

On the other hand, the development of industrial and urban DES/CCHP, and the optimization and development of petrochemical industrial energy, as well as the development of LNGV, are as important as imported LNG. And more deeply, we must achieve the energy strategic goal of improving energy efficiency, optimizing energy structure and ensuring energy security. It is only necessary to coordinate with the imported LNG project in order to better coordinate with the various departments of the government. We will make more comprehensive plans for the development of natural gas industry chains, including industrial development, industrial transformation, urbanization, the environment, transportation, energy and electricity, etc. We carefully set out the necessary encouragement and preferential policies. A government that is service-oriented, undivided and integrated can do just that. This is also a catalyst and an opportunity to promote reform of government institutions.

The price of natural gas is closely related to the price of oil. From 1985 to 2005, the historical record of the gradual change of natural gas from linear price equation to S curve price formula shows that the long-term contract price of natural gas fluctuates with oil price, but the time lag, and the fluctuation range is small; Generally lower than oil prices, especially since the turn of the century. In the past two years, oil and gas prices have fluctuated wildly. The relationship between natural gas and oil prices in the future will largely maintain this relationship, but it will increase uncertainty.

The domestic prices of natural gas in the world are not fully synchronized with international prices. There are three cases, the first case is the United States, Europe, Japan and other economically developed countries, they have a strong currency exchange rate, high per capita GDP and strong ability to bear international oil and gas prices. For example, 20 cents per cubic meter of natural gas, for the developed world, is only about a quarter of the McDonald's for four dollars a meal. But for China, 20 cents per cubic meter, or 1.6 yuan, is a fifth of the 8 yuan meal. This is the effect of the degree of economic development and the impact of the currency exchange rate on consumers at the same price.

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