Photo: Anthony Veder

Great potential for cooperation between Norway and China in the LNG sector

Last updated: 21/11/2011 // Norwegian companies are well positioned to support Chinese companies in the rapidly developing LNG industry, including regasification and maritime technologies. This is one of the findings of a study exploring the opportunities for cooperation between Norway and China in the LNG sector. The report will be presented at a seminar in Shanghai November 28, 2011.

The rapidly growing LNG industry in China is expected to draw on wide support from foreign companies in order to meet the demand for technologies and competencies needed to realise ambitious targets.  The study explores the commercial and strategic opportunities in China’s LNG sector, assessing the overall natural gas market in China, of which LNG is a vital part. It also identifies the key developments where Norwegian companies have experience and competencies that can help China meet its targets. The study is a co-investment by the Norwegian Embassy and Consulates General in China, as well as Innovation Norway China and DNV.

Possible areas of cooperation between Chinese and Norwegian companies identified by the study include LNG regasification solutions, small scale LNG distribution, LNG as marine fuel, LNG bunkering and ship to ship transfer, maritime technologies like propulsion and fuel tanks and standardization activities. Norwegian companies could make use of their unique experiences to benefit Chinese companies by supplying vessels and on-board equipment, as well as leading the joint-development of advanced maritime technologies. They could also provide advisory services to better manage safety and environmental risks that come with the rapid growth and change in paradigm of the LNG value chain in China.

“Norway, as a major energy nation, sees great opportunities for a wider cooperation with China. This report clearly illustrates the potential for such cooperation in the development of Chinas LNG’s sector,” says Norwegian Ambassador to China Svein Sæther.

Natural gas is an important part of China’s 12th Five Year Plan which forecasts an 8.3% share of natural gas in the country’s primary energy mix by 2015, up from 4% in 2010. To reach this aggressive target, China would need to import approximately 50 – 60 bcm of natural gas (both LNG and pipeline imports) in 2015, similar to the current import level of the European Union. By 2015, LNG imports are expected to be supported by 14 LNG receiving terminals supplied by more than 65 LNG carriers according to China Shipbuilding Economic Research Center.

"DNV has been present in China since 1888 supporting industry partners and clients with independent risk management services throughout various maritime and offshore industry cycles. This project will further help us understand how DNV can play an even more active role into the Natural Gas developments that the 12th Five Year plan will open up for ,” says Mr. Stone Zhang, Director of Operations, DNV China Energy.

Ms. Gunn Ovesen, CEO of Innovation Norway, states “We are delighted to have partnered with DNV and MFA in order to come up with relevant information for Norwegian companies operating in Asia. Norway is one of the few places in the world where a small scale LNG cluster is operational and I am glad to see that Norwegian capabilities and technologies are well positioned and asked for when these value chains now are taking off throughout Asia in the years to come”.

On DNV.com: Potentials identified for foreign companies in China’s fast growing LNG sector.