China to launch new import terminal to receive LNG from Exxon

China’s Guangdong Energy Group is to start commercial operations next week at a new LNG import terminal that US supermajor ExxonMobil can use under a long-term agreement, Reuters reported on Thursday, citing industry sources.

The Huizhou LNG Receiving Terminal in southern China’s Guangdong Province has the capacity to handle 4 million metric tons of LNG per year and cost $1 billion to complete.

The LNG import site has already received the first LNG cargo. A shipment from the United Arab Emirates (UAE) arrived in August as part of a trial operation, according to Reuters sources.

ExxonMobil has been exploring opportunities to deliver LNG to China to advance China’s energy transition.

In September 2018, ExxonMobil and the People’s Government of Guangdong Province signed a strategic cooperation agreement for a proposed world-scale chemical complex and to supply gas to the proposed Huizhou LNG terminal in southern China. In October 2018, ExxonMobil signed an agreement to supply Zhejiang Provincial Energy Group with 1 million metric tons per year of LNG for 20 years, starting in the early 2020s.

In December 2023, Exxon agreed to use the new terminal to handle 1.8 million tonnes of LNG per year under a 20-year deal with Guangdong Energy, one of the sources with direct knowledge of the matter told Reuters plans.

Guangdong Energy, a utility that imports large quantities of gas, is backed by the provincial government.

A representative of ExxonMobil China confirmed to Reuters that there is an agreement between the US supermajor and the company for access to the LNG import terminal.

ExxonMobil, through its affiliates and LNG joint ventures, produces 23 metric tons per year of LNG globally. With LNG suppliers, the US supermajor currently delivers the super-cooled fuel to 30 countries.

Exxon considers its LNG operations to be advantageous assets prioritized for development and growth, along with oil and gas production in the Permian, Guyana and Brazil.

By Charles Kennedy for Oilprice.com

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