Kunlun Energy Co. Ltd. has resumed, or was in the process of resuming, production at seven LNG plants, including China's largest, to meet upcoming winter demand, its parent PetroChina said on Oct. 25.
The biggest plant, located in Huanggang in central Hubei province, was opened in 2014 and has a capacity of 5 million cubic meters per day (MMcm/d). It was reopened earlier in October after a ten-month shutdown, according to a report on the website of China National Petroleum Corp. (CNPC), the state-owned firm that is in turn the parent of PetroChina.
The CNPC report gave no details on the reason for the shutdown. PetroChina said Kunlun has also started resuming operations at plants in Guangyuan, Guang'an, Zhaoqing, Renqiu, Bazhou and Ansai, mostly in southwestern Sichuan province and northern Shaanxi province.
Most of these plants process locally-produced natural gas into LNG in areas that are not connected to a pipeline grid for transport, by truck, to areas where the LNG can be used as a transport, industry or other fuel.
Kunlun was forced to shut several of its key LNG plants, including the Huanggang facility, when gas lost its relative competitiveness in mid-2014 after a plunge in oil prices. It was not clear how long the plants were closed then.
Kunlun is one of the country's largest onshore LNG facilities, having spent billions of dollars on a dozen LNG plants, mainly in the country's west and north, and building over 600 gas refuelling stations.
The company separately operates two multibillion-dollar LNG import terminals on China's east coast.
News of the restarts comes days after the government called on producers to ramp up natural gas output ahead of the winter to ensure plentiful supplies.
Industry experts also expect major gas producers like PetroChina to start raising wholesale gas prices, beginning in November, under a government policy from late 2015 that allows an upward adjustment between 10% and 20% to non-residential users.
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