Sinopec to build gas storage in northern China

Sinopec is constructing over a dozen natural gas storage facilities in northern Henan Province of China, aimed at easing gas supply bottlenecks in winter. The company will include 16 facilities built at the site of non-operating oil and gas fields in the province, such as the Zhongyuan oilfield. The total new capacity is planned at 55.6 billion cubic meters (Bcm), Kallanish Energy learns.

“The Zhongyuan oilfield has entered its final stage after more than 40 years of exploration and development, but some underground reservoirs have formed an enclosed space that is suitable for gas storage,” said Li Cungui, Director of oil and gas development management department at Zhongyuan Oilfield Branch.

The additional gas storage capacity in northern China also is expected to help alleviate supply issues to central and eastern China, as well as cushion surges in liquefied natural gas (LNG) prices. Last winter, LNG spiked to a high of $11.70 per million British thermal units, on the back of infrastructure and logistical issues. The imported fuel was often trucked to regions not connected by pipelines.