Chinese Petroleum Corp (中油), Taiwan's only natural gas producer and importer, is considering buying liquefied natural gas from eastern Russia to diversify its source of supply.
State-owned Chinese Petroleum may buy gas from the Royal Dutch/Shell Group-led Sakhalin II project, to add Russian supplies to those already received from Indonesia and Malaysia.
Deliveries from Qatar are due to start in 2008, Jane Liao, general manager of LNG purchasing division, said today.
Taiwan's imports of LNG may rise from about 6 million tonnes a year to about 9 million tonnes a year by 2010, less than the government's 1998 forecast of 11.8 million tonnes, Liao said.
One of Chinese Petroleum's Indonesian LNG purchase contracts is due to expire in 2009.
"In the future we are not going to buy from a single buyer with a huge quantity, the diversification of sources is very important," Liao said in an interview during an LNG conference in Singapore organized by Conference Connection Administrators Pte.
"Sakhalin, they have an advantage, although geographically it is not so close, compared with Indonesia and Malaysia."
LNG is natural gas that has been cooled to a liquid for transport by tanker to destinations not connected by pipeline. On arrival it is turned back into gas for delivery to power plants and other customers.
Increasing the number of LNG suppliers gives Chinese Petroleum more options when it has to buy additional cargoes to cover a temporary shortfall, because suppliers reserve any surplus volumes for long-term customers, Liao said.
Chinese Petroleum is this year buying additional LNG cargoes from BP Plc and Shell to cover a shortfall from PT Pertamina in Indonesia and to meet demand for gas from Taiwan Power Co's (台電) Tatan plant, she said.
RSS