Welcome to Gas Pipelines on Wheels By Bloomberg
(Bloomberg) -- Gas is in such hot demand in China right now it’s allowing a quirky market to flourish: transporting the fuel on trucks.
Call them pipelines on wheels. The country’s top suppliers are loading liquefied onto tanker trucks and delivering it to users to make up for insufficient pipeline coverage inland. The method is so effective ENN Group is using it as a primary way to move LNG from its new terminal.
This new kind of gas market has thrived in China over the past few years as the government’s blue-sky policies boosted demand for the cleaner-burning fuel faster than pipelines can be built to support them. It’s also unregulated, allowing nimble sellers to benefit from rising prices during peak consumption seasons, while the city-gate benchmark remains at government-set rates.
“We haven’t seen this kind of volume in trucked LNG anywhere else in the world” said Xizhou Zhou, head of China energy research for IHS Markit. “This market in China is a reflection of the market distortion caused by regulated city-gate prices, increasing supply and demand, and price volatility.”
ENN is betting this method of transporting LNG will endure. The distributor’s new terminal in Zhoushan, a tiny island at the mouth of the Yangtze River, is the first in the world built to load the majority of its imports onto trucks instead of reheating them to their gaseous state for pipelines or power plants.
The facility is designed to import about 3 million tons of LNG a year, with 2 million destined ....