In 2014, the entire LNG industry was in recession and entered a cold winter. Due to limited gas sources and falling international oil prices, various companies in the LNG industry chain are struggling to survive; shipments are not smooth and work is insufficient, and confidence has been hit. Enterprises urgently need to work together as a team and actively make their voices heard, calling on the state to introduce relevant policies to support the LNG industry. The industry's plight urgently requires the multi-pronged efforts of all relevant parties to work together to rescue the market.

On January 16, the "National LNG Industry Alliance Conference" led by the Shaanxi Gas Design Institute and initiated and organized by 18 units was held in Xi'an, Shaanxi Province.

Xu Bo, a senior economist at the PetroChina Research Institute of Economics and Technology, said that the domestic LNG market is gradually entering a pathological cycle. Upstream production capacity has exploded while downstream demand development has gradually slowed down. There is overcapacity and oversupply. LNG cannot develop sustainably. Do it blindly. Jiang Xinmin, deputy director of the Energy Institute of the National Development and Reform Commission, also said at the meeting that China's rapid development of the LNG industry has been continuously encouraged by the state, but in the face of market difficulties such as slowing economic growth and declining energy demand, support needs to be improved. The development prospects of LNG are promising, but its "health" still needs to be monitored to make the new energy technology truly sustainable and permanent.

Dilemma: "Sandwich Cake" faces multiple embarrassments

As the country vigorously develops the application of natural gas, especially LNG, relevant national departments and local governments have introduced a number of favorable policies. In recent years, the LNG industry has achieved rapid development. A large amount of capital has entered the LNG field, gradually forming a complete industrial chain and a mature and feasible business model. However, with the deepening of domestic natural gas price reform and the continuous decline of international crude oil prices, the development of the LNG industry, especially the terminal sector, has slowed down significantly, entering a development bottleneck period and falling into trouble.

Looking at the current situation of the LNG industry, the advantages of LNG as a fuel substitute for diesel are lost; the economy is weak and the demand from traditional consumer industries is slowing down; natural gas prices are rising against the trend, and the cost of LNG projects has increased significantly; blind and disorderly development has caused losses in both the upstream, middle and downstream industries; The number of unconventional liquefaction projects has increased, conventional pipeline gas liquefaction projects have been affected, and the industry is facing many difficulties.

Liang Jin, a senior researcher at ICIS, said that today's LNG industry is like a "sandwich cake", facing the multiple embarrassments of high upstream gas source monopoly prices, imperfect downstream market development, new energy challenges, and large import volumes and low prices.

"Domestic natural gas prices are low and do not fully reflect changes in market supply and demand and resource scarcity. With the steady advancement of the price reform mechanism, our country will rationalize natural gas prices and improve the marketization of natural gas utilization. The development trend is undoubtedly that prices will rise. , which will bring greater challenges to the LNG industry," Jiang Xinmin said.

Liu Guangbin, director of Zhuochuang Information, still optimistically told reporters that LNG is an important part of the national economy. There is great room for increasing the proportion of domestic natural gas consumption in our country, and the market share will further increase. It is untenable to conclude that LNG has entered its terminal stage and is extinct. of. "The industry is experiencing difficulties, but there is no need to be too pessimistic. However, considering that my country's gas infrastructure is not yet complete, domestic natural gas supply will still exceed demand for 2-3 years," he said.

Terminal: Expanding the heavy vehicle and ship market

It is reported that the growth of natural gas vehicles has been slow in the past due to the shortage of gas sources. However, with the increase of imported natural gas, favorable conditions have been created for the development of the natural gas market for transportation. It is expected that the average annual compound growth rate of transportation gas will be 35% in the next three years, reaching 2015. By then, the number of natural gas vehicles will reach 2.4 million, of which 147,000 will be LNG vehicles. There is great potential for LNG used in vehicles and ships.

2014 was a year of great development for LNG buses, accounting for 59.31% of national bus sales. The promotion speed was rapid, and the growth of natural gas heavy trucks slowed down. If the market recovers, there will be room for improvement in the performance of heavy-duty trucks.

"The country now attaches great importance to electric vehicles, but to some extent, it replaces reality with an unattainable future and fails to see that there must be a transition process from natural gas vehicles to electric vehicles. The academic level does not represent At the industrialization level, electric car technology cannot be copied on heavy trucks and ships. Even if electric car technology is considered to be the future development direction, it still needs a long transition period. LNG vehicles (ships) are the most realistic and feasible transition product. " Guo Zonghua, president of Shaanxi Gas Design Institute, told reporters.

Luo Xiaofeng, director of the Wuhan Standardization Research Institute of China Classification Society, pointed out that LNG is a rigid demand for the shipping industry. After learning from the experience gained in inland rivers, the development of ship LNG will gradually develop toward the coast and eventually toward the ocean. With the reserve of ocean-going technology, the LNG terminal market The future is promising.

However, the current terminal market is weak, price factors are rising, oil is falling, and the price gap between LNG and diesel is close, which dampens the enthusiasm of end customer car owners.

It is understood that the main consumer market of LNG is for vehicles (ships), but currently there is no national subsidy for natural gas vehicles, the price of LNG vehicles and ships is high, and the gas refueling network is not perfect. Therefore, if the LNG vehicle market is to flourish, it is essential to increase policy support.

Data shows that my country's LNG import capacity is expected to increase from the current 25.5 million tons per year to more than 80 million tons in 2018. After 2020, China's annual LNG supply capacity will exceed 110 million tons. The number of LNG filling stations nationwide has increased from dozens in 2010 to more than 2,145 at present, and the development speed has increased exponentially.

In 2015, it is particularly important to find LNG sales channels and broaden your downstream horizons. Liu Guangbin, director of Zhuochuang Information, pointed out that no matter which LNG terminal investment model is based on project development, project construction and production goals need to be determined. Only when there is market demand can there be construction intentions. Therefore, it is necessary to clarify the demand and supply of local market products and determine the goals. User and demand scale, determining supply and demand prices in the local market, and determining market development trends.

Han Xiaoqing, business manager of Ningxia Hanas Energy Development Co., Ltd., also suggested that in terms of cultivating terminal demand, we should vigorously cultivate the vehicle and ship market and provide preferential industrial policies, such as exemption from tolls and purchase tax.

The way out: collective efforts and orderly development

The fundamental reason why LNG has fallen into a "cold winter" is still because of "high gas prices", which has led to "downstream congestion", and downstream congestion is due to insufficient policy support.

LNG's upstream and midstream sectors are highly motivated, and gas stations are increasing rapidly. This has led the government and industry to believe that LNG gas stations and LNG vehicles are highly profitable and highly competitive. They have ignored the numerous gas station construction procedures, difficult land acquisition, and difficult site selection issues.

As an enterprise representative, Wang Peng, general manager of Nanjing Suneng Natural Gas Development Co., Ltd., believes that land cost and equipment cost are the main expenses. Cost saving is one of the means to cope with the current difficulties in gas filling station operations, so using domestic equipment is a feasible solution. As competition intensifies, domestic equipment helps reduce costs, reduce expenses and improve operational efficiency.

In addition, the existing network of LNG filling stations is imperfect. LNG filling stations can only be used for point-to-point transportation. There is a lack of LNG stations on inter-provincial highways and uneven development. The LNG terminal investment is large, and not only does the cost recovery have a cycle, which affects the investment enthusiasm of the owners, but also the terminal development is from scratch, and the energy replacement of the customer group requires additional modification fees, which affects the owners' enthusiasm for using clean energy LNG.

Han Xiaoqing believes that local governments also need to consider local demand, rationally plan LNG projects, and prevent blind and disorderly investment from exacerbating overcapacity. At the corporate level, conduct thorough research before investing and invest prudently. In terms of raw gas prices, it is necessary to gradually realize marketization and truly have independent negotiation between the supply and demand parties. At the same time, as the types of gas sources become increasingly complex, explore pricing based on calorific value. "The most important thing is to establish and improve the industry supervision mechanism to curb fraud, participation and other phenomena, and maintain the good development of the industry." She told reporters.

Liu Guangbin believes that for the coordinated development of the LNG industry chain, it is necessary to maintain reasonable profit margins, not engage in price alliances, have a spirit of self-discipline, establish alliances, enhance the voice of safeguarding rights and interests, standardize industry competition, and guide the healthy development of the industry.

In order to increase the enthusiasm of practitioners, industry insiders have issued an initiative, suggesting that LNG terminal applications, especially the layout planning and project approval of gas filling stations and satellite stations, should be handled centrally or through joint meetings of various departments to simplify procedures; it is recommended that the government introduce Policy land support provides appropriate policies for the use of land for projects such as LNG filling stations, satellite stations, and storage depots. For gas companies that are converting coal to gas or oil to gas, subsidies will be provided to gas companies based on energy conservation and emission reduction; It is recommended that pioneer companies invest a large amount of manpower and material resources. The disorderly competition in the later market is inconsistent with market rules and affects the initiative of companies. It is recommended to refer to urban gas franchises, designate gas filling station franchise policies, formulate local gasification station franchise policies, and protect pioneers. Long-term benefits; it is recommended to introduce relevant policies to support the application of LNG in the logistics and passenger transportation industries and boiler-using industries, such as reducing bridge and road gate tolls and issuing boiler renovation subsidies.

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