China looks to diversify its gas supplies « The Barrel Blog

Shwe pipeline details covered elsewhere -- but this Platts article has nice volume and pricing data on Chinese gas imports (e.g. Qatari LNG cargoes at $18/mmcf) and a good description  of how non-residential consumer gas prices will be set and linked to wholesale mkt under new rules. Notable is that avg import LNG prices in 2009 were $4.39/mmbtu, first half of this year were $11.13/mmbtu (this is why China wants to own gas in S. China Sea)... the Myanmar volumes will only account for under 10% of China's total natural gas imports. ... Turkmenistan is now China's biggest supplier of foreign gas. In the first half of this year, pipeline imports from Turkmenistan rose 40.9% year on year to 8.61 million mt (11.88 Bcm) while Uzbekistan imports totaled 817,425 mt, bringing total Central Asian imports to 9.43 million mt, a 52.3% rise year on year. LNG imports over the same period were up 25% year on year to 8.34 million mt, with Qatari volumes accounting for 3.36 million mt.

An analysis of customs data shows that China has steadily paid more for its imported gas over the years. Average delivered LNG prices — excluding regasification costs — were just $4.39/MMBtu in 2009, according to customs data. As more LNG terminals were built and Chinese state companies expanded their pool of LNG suppliers, the average import price rose to $6.20/MMBtu in 2010 and reached $11.13/MMBtu in the first half of this year. ...From July 10, Beijing raised prices for non-residential consumers about 15.4% to an average Yuan 1.95/cu m, or about $8.90/MMBtu. It also divided gas supplies into tiers of pricing: one encompassing 91% of supply using 2012 consumption as the base, and another tier affecting incremental supply volumes to non-residential users, estimated to be 11 Bcm this year. The price of existing supply volumes will be set by the government while incremental supply prices have been set at an 85% correlation to the average H2 2012 price of imported fuel oil and LPG. The implication for upstream producers and gas importers is significant as average netbacked wellhead prices—citygate prices less transport tariffs — have increased by some 20%, Bernstein Research said last month. Over the next three years, CNPC's average wellhead gas prices will likely increase from Yuan 1.1/cu m to Yuan 1.8/cu m, a 63.6% jump, the bank said.