Energy 35 (2010) 43834391

Contents lists available at ScienceDirect

Energy
journal homepage: www.elsevier.com/locate/energy

LNG (liqueed natural gas): A necessary part in Chinas future energy

infrastructure
Wensheng Lin a, *, Na Zhang b, Anzhong Gu a
a
b

Institute of Refrigeration and Cryogenics, Shanghai Jiao Tong University, Shanghai 200240, China
Institute of Engineering Thermophysics, Chinese Academy of Sciences, Beijing 100080, China

a r t i c l e i n f o

a b s t r a c t

Article history:
Received 3 July 2007
Received in revised form
7 December 2008
Accepted 24 April 2009
Available online 30 June 2009

This paper presents an overview of the LNG industry in China, covering LNG plants, receiving terminals,
transportation, and applications. Small and medium scale LNG plants with different liquefaction
processes have already been built or are being built. Chinas rst two LNG receiving terminals have been
put into operation in Guangdong and Fujian, another one is being built in Shanghai, and more are being
planned. China is now able to manufacture LNG road tanks and containers. The construction of the rst
two LNG carriers has been completed. LNG satellite stations have been built, and LNG vehicles have been
manufactured. LNG related regulations and standards are being established. The prospects of LNG in
China are also discussed in this paper. Interesting topics such as small-scale liqueers, LNG cold energy
utilization, coal bed methane liquefaction, LNG plant on board (FPSO oating production, storage, and
off-loading), and LNG price are introduced and analyzed. To meet the increasing demand for natural gas,
China needs to build about 10 large LNG receiving terminals, and to import LNG at the level of more than
20 bcm (billion cubic metre) per year by 2020.
2009 Elsevier Ltd. All rights reserved.

Keywords:
LNG
Natural gas
Liquefaction plant
Receiving terminal
Prospect

1. Introduction
With the rapid economic development in Mainland China, its
demand for energy supply is also increasing at the rate of more than
10% per year. China relies heavily on its coal supply, although natural
gas consumption has been growing quickly in recent years. According
to the data in Table 1, which is drawn from BPs statistical review [1],
the total fossil fuel consumption in China was 1491.1 Mtoe (million
ton oil equivalent) in 2006. The proportions of coal, oil, and natural gas
were 73.2%, 23.5%, and 3.3%, respectively. Meanwhile, natural gas
accounted for 26.9% of the world fossil fuel consumption.
Natural gas is a kind of clean and efcient energy resource. To
ensure a cleaner future, China has realized the importance of
utilizing more natural gas. China has relatively abundant reserves
of natural gas. The reserves/production ratio of natural gas was 41.8
in 2006, compared to that of oil of 12.1, a very low ratio. Yet, China
still needs more natural gas to fulll its energy requirement.
According to an estimation [2], the natural gas consumption will
reach 100 bcm (billion cubic metre) and 200 bcm in 2010 and 2020,
respectively, but the production will only reach 80 bcm and

* Corresponding author. Tel.: 86 21 34206533; fax: 86 21 62932602.

E-mail address: linwsh@sjtu.edn.cn (W. Lin).
0360-5442/$ see front matter 2009 Elsevier Ltd. All rights reserved.
doi:10.1016/j.energy.2009.04.036

120 bcm, respectively. This means that about 20% and 40%,
respectively, of the consumption will be imported.
Besides, importation through pipelines from Russia and some
from the Central Asian countries, natural gas can also be imported
in liqueed form known as liqueed natural gas (LNG). Well puried and condensed, LNG is easily transported across the sea. Also
from BPs statistical review [1], 28.2% of the international natural
gas trade movement was in the form of LNG in 2006. Assuming the
same proportion for Chinas import, 5.6 bcm and 22.6 bcm natural
gas will have to be imported as LNG in 2010 and 2020, respectively.
Considering the capacity of an LNG terminal is 3 Mt/a, it would
mean at least ten receiving terminals need to be built by 2020.
The arrival of the rst LNG carrier at Shenzhen Dapeng LNG
terminal on June 2006 marked a new era in Chinas energy supply
history. It was the rst time that natural gas was imported into
China, and the day its rst LNG receiving terminal was put into
operation.
Every aspect of the LNG chain in China has developed signicantly over the last few years. By far, several natural gas liquefaction
plants, LNG receiving terminals, and LNG satellite stations have
been built or are being built. More are being planned. Several LNG
fueling stations and LNG-red power plants have also been built.
Several LNG-fueled buses are running. Many LNG road tankers and
containers have been manufactured. Two LNG carriers have been

4384

W. Lin et al. / Energy 35 (2010) 43834391

Table 1
Summary of fossil fuels in China and the world [1].
Oil

Proved reserves (Mt)

Production (Mt)

Consumption (Mt)

R/P ratio

China
World total
Coal
China
World total
Natural gas
China
World total

2200
164,500
Proved reserves (Mt)
114,500
909,064
Proved reserves (bcm)
2450
181,460

183.7
3914.1
Production (Mtoe)
1212.3
3079.7
Production (Mtoe)
52.7
2586.4

349.8
3889.8
Consumption (Mtoe)
1091.3
3090.1
Consumption (Mtoe)
50.0
2574.9

12.1
40.5
R/P ratio
48
147
R/P ratio
41.8
63.3

constructed and more have been ordered. Chinas LNG industry

started late. However, it has been growing very fast.

2. Current status of LNG in China

2.1. Natural gas liquefaction plants
China began its LNG plant research in the late 1980s. Two sets of
LNG plants were then developed by the Cryogenic Center of the
Chinese Academy of Science (CAS). Their production capacities
were 0.3 m3/h and 0.5 m3/h, respectively. These plants were too
small and were only in operation for a very short duration.
2.1.1. Shanghai peak-shaving LNG plant
Located near the sea, Shanghai LNG plant is a peak-shaving one
[3]. It was commissioned in March 2000, and is the rst industryscale LNG plant in China. It is the primary part of the East sea
natural gas project. It receives natural gas from gas elds in the East
sea through underwater pipelines, liquees the gas, and supplies it
to Shanghai in case of typhoons and underwater pipeline accidents.
The natural gas at 1.5 MPa from the main line is ltered, gauged,
and compressed to 5 MPa. CO2 and H2S in the natural gas are
removed by MEA (mono ethanol amine), H2O is removed by zeolite,
and the puried natural gas is liqueed and stored in two 104-m3
tanks. LNG is then regasied, odorized, and regulated to the city gas
network on demand. The evaporated gas in LNG tank is introduced
into the main line after boil-off-gas (BOG) treatment.
The main parameters of this plant are as follows: (1) volume of
tank, 20,000 m3; (2) daily evaporation rate of LNG tank, 0.08%/d; (3)
LNG production, 165 m3/d; (4) regasifying capacity, 120 m3 (LNG)/
h; (5) refrigerant components, N2: 7.145%, CH4: 35.17%, C2H6:
45.588%, C3H8: 7.259%, n-C4H10: 2.34%, i-C4H10: 0.923%, n-C5H12:
0.361%, i-C5H12: 1.215%.
The refrigeration cycle of the process is the integral incorporated
cascade (CII) cycle developed by Gaz De France. The main

Fig. 1. CII cycle for the Shanghai LNG plant: 1 - fractionation column, 2 - cold box,
3 - compressor (low pressure stage), 4 - compressor (high-pressure stage), 58 - liquid
vapor separator, 911 - throttling valve, 12, 13 - cooler.

equipments of the cycle are the compressor, the fractionation unit,

and the cold box (see Fig. 1). The CII cycle is characterized by the
following features: (1) concise process requiring less equipment;
(2) the cold box adopts a plate-n heat exchanger which is small in
size and convenient to install; (3) a simple and reliable compressor
as well as driving engine was chosen.
2.1.2. Zhongyuan LNG plant
The successful start-up of the LNG plant at Zhongyuan oil eld in
2001 symbolizes an important milestone for the Chinese LNG
industry. It is the rst commercially operated LNG plant in China.
Unlike the Shanghai LNG plant, which does not sell any LNG
outside, this plant sells most of its LNG to customers in Shandong,
Jiangsu, and other provinces by LNG tank trucks.
Zhongyuan LNG plant has a production capacity of 15,000 Nm3/d.
Natural gas is supplied at 12 MPa and 30  C, with methane mole
percentage of 93.35w95.83%. It adopts the cascade refrigeration
cycle with propane and ethylene as refrigerants. The owchart of the
liquefaction process is shown in Fig. 2 [4].
LNG produced by the liquefaction plant is stored in tanks. Each
tank contains seven small tanks and an outer shell. Insulating
material lls the space between the outer shell and the small tanks.
Nitrogen is lled into the insulation layer to prevent entry of air and
water into this layer.
2.1.3. Xinjiang Guanghui LNG project
The rst phase of the Xinjiang Guanghui LNG plant was put into
operation in 2004. Located in Shanshan city, the plant obtains its
natural gas resource from the Tuha gas eld. With its
1,500,000 Nm3/d capacity to treat feed gas, it is by far the largest
LNG plant in China. The expected on-stream time is 330 days per
year, and the design hourly liquefaction capacity is 54 t/h, which
means the annual production of the plant is 0.43 Mt/a.
The storage capacity is 30,000 m3 in liquid form of LNG based on
10 days storage time. The LNG send-out and distribution system
capacity meet the requirement of loading 100 trucks/movable

Fig. 2. Cascade cycle for the Zhongyuan LNG plant: 1 - separator, 2 - lter, 3 - CO2
removing unit, 4 - water removing unit, 5, 6 - propane heat exchanger, 7, 11, 14 - throttling
valve, 8, 12, 15 - NG separator, 9 - ethylene heat exchanger, 10, 13 - natural gas heat
exchanger, 16 - LNG tank.

W. Lin et al. / Energy 35 (2010) 43834391

4385

Fig. 3. Liquefaction process of the Xinjiang Guanghui LNG plant.

containers within 16 h. The split is 30% in trucks and 70% in

movable containers. LNG is sent to central- and southern China,
including Guangdong, the most remote province from Xinjiang.
This plant is comprised of ve major parts: purication, liquefaction, LNG tank, LNG send-out, and are tower.
Fig. 3 shows a sketch of the mixed-refrigerant cycle for the
Xinjiang LNG plant. The cooling is provided by a closed multicomponent mixed-refrigerant cycle, developed by Linde AG [5]. The
mixed-refrigerants consist of nitrogen, methane, ethylene,
propane, and pentane.
2.1.4. Summary of LNG plants
Besides the three LNG plants mentioned above, two other plants
have been built in Hainan and Guangxi provinces. Both adopted the
expander cycle for refrigeration.
In recent years, a kind of small LNG plant has been developed in
China, which adopts direct expansion of natural gas from a highpressure main line. Two plants of this type have been built in the
provinces of Sichuan and Jiangsu, with capacity of about
50,000 Nm3/d.
Three LNG plants are being built in Erdos (Inner Mongolia),
Dazhou (Sichuan), and Zhuhai (Guangdong). All these plants adopt
the PRICO process [6] developed by Black and Veatch. The PRICO
process uses a single mixed-refrigerant loop and a single refrigeration compression system, greatly simplifying the piping, controls,
and equipment for the liquefaction unit. Chemtex is constructing
these three plants.
Table 2 gives details of most of the LNG plants in China that have
been built and those being built.
2.2. LNG receiving terminals
2.2.1. Shenzhen Dapeng LNG terminal
The Shenzhen Dapeng LNG terminal is Chinas rst LNG
receiving terminal [7]. It began receiving LNG product from an LNG
carrier (LNGC) in June 2006. It is located on the Western Dapeng

peninsula to the east of Shenzhen. The site is 33 km south-east from

downtown Shenzhen and 40 km from the eastern side of Hong
Kong island. The terminal will send-out natural gas to the Pearl
River Delta, including the cities of Shenzhen, Dongguan, Guangzhou, Foshan, and Hong Kong.
The project has the capacity to receive, store, regasify, and
distribute 3.7 Mt/a of LNG. Two full containment concrete-roof LNG
storage tanks have been built, each with a net capacity of
160,000 m3. The normal vaporizing operation is carried out with
ve ORVs (open rack vaporizers), each capable of a send-out of
180 t/h.
The marine works and unloading facilities consist of an allweather, deep-sea, single-berth jetty with a 296-m long approach
trestle and jetty head; unloading facilities were designed to
discharge a 145,000-m3 LNGC in 12 h into a single tank.
The Australian company ALNG NWS venture was selected as the
LNG supplier. The LNG supply contracts were signed with Guangdong province with contracting fees ranging from 20 billion to 25
billion Australian dollars. Beginning in the year 2006, LNG will be
imported from Australia for a period of 25 years.
The total estimated cost of the project is about US$900 million.
The terminals are owned by China National Offshore Oil Company
(CNOOC, 33% share), BP (30% share), and several other sponsors
from Guangdong and Hong Kong.

Table 2
Summary of LNG plants in China.
Project

Location

Type

Capacity (Nm3/d) Status

East sea
Zhongyuan
Guanghui
Hairan
Beihai
Erdos
Dazhou
Zhuhai

Shanghai
Henan
Xinjiang
Hainan
Guangxi
Inner Mongolia
Sichuan
Guangdong

Peak-shaving
Base load
Base load
Base load
Base load
Base load
Base load
Base load

1.0  105
1.5  105
1.5  106
1.5  105
1.5  105
6.0  105
6.0  105
6.0  105

Built
Built
Built
Built
Built
Under construction
Under construction
Under construction

4386

W. Lin et al. / Energy 35 (2010) 43834391

Phase II of the project will be completed in 2008 and the annual

import capacity will increase to 5 Mt/a.
2.2.2. Fujian Putian LNG terminal
Chinas second LNG importation terminal is being built in
Putian, Fujian province. It is intended to supply two major new
power plants, Songyu II (1800 MW) in Xiamen, and Nanpu
(1800 MW) in Quanzhou, together with the ve major coastal cities
of Fuzhou, Xiamen, Quanzhou, Zhangzhou, and Putian. The
construction of the Putian terminal started in 2004 and the
terminal is scheduled to be commissioned in late 2007. This
terminal is controlled by CNOOC.
The LNG Sales and Purchase Agreement was signed between
BPMIGAS (Implementing Agency for the Upstream Oil and Gas
sector in Indonesia) and CNOOC. According to the agreement,
Indonesia will supply 2.6 Mt/a of LNG to Putian LNG terminal for
a 25-year period. The LNG will be produced at the Tangguh LNG
project. This project, which is located in Irian Jaya Barat, Indonesia,
is to develop, build, and operate gas production wells, platforms
and an LNG facility to export gas initially to China, Korea, and the
West Coast of North America.
2.2.3. Shanghai LNG terminal
Shanghai began to construct Chinas third LNG receiving
terminal in early 2007. The Shanghai LNG terminal is located at
the Yangshan Deepwater port, 30 km away from the mainland.
The project is an important step of the citys efforts to diversity
its energy supply. It is expected to go into operation in the rst
half of 2009, when it will start processing imported LNG from
Malaysia.
Shanghai plans to use 6 bcm of natural gas by 2010, representing
about 7% of its primary energy consumption, according to
a government white book. The ratio for 2005 was 3.1%. Shanghais
natural gas demand is now met by supplies from the countrys
west-east pipeline and from reserves in the East China sea. The
Shanghai LNG terminal project will help to ease Shanghais tight
natural gas supply situation, improve energy security, reduce
emissions, and boost efciency.
The rst phase of the Shanghai LNG terminal project, which will
cost 7 billion CNY (900 million USD), will have the capacity to
handle 3 Mt/a LNG, or 4 bcm/a of natural gas. It features three
tanks, each capable of holding 165,000 m3 of LNG and a berth to
accommodate a supply ship. The second phase of the project will
double LNG handling capacity to 6 Mt/a.
The Malaysian energy company Petronas will supply the
Shanghai terminal under a 25-year contract signed in July 2006.
Petronas will start shipping LNG to Shanghai in mid-2009, starting
with 1.1 Mt/a and gradually increasing the load to 3 Mt/a in 2012.

The Shanghai terminal will be operated by Shanghai LNG Co.

Ltd, a joint venture between Shenergy (55% share), a local stateowned energy corporation, and CNOOC.
2.2.4. Summary of LNG receiving terminal details
Besides the three terminals mentioned above, there are about 10
other receiving terminalsdplanned or proposed. Some of the
projects are very likely to begin construction soon, such as the one
in Ningbo, Zhejiang province. Some others are simply not in
progress. There was once a rough plan that each of the 11 coastal
provinces will have one LNG receiving terminal. These details are
summarized in Table 3, which also include the terminal in Zhuhai,
and the second one in Guangdong province. Some information in
Table 3 is taken from Ref. [8].
2.3. LNG transportation
2.3.1. LNG tank trucks and tank containers
At present, the transportation of LNG from production sites to
users takes the form of LNG tank trucks or tank containers that have
been manufactured by rms in Sichuan, Jiangsu, and Hebei
provinces.
There are two kinds of tank trucks in China, 27 m3 and 40 m3.
Due to the cryogenic nature of LNG, the tanks are thermally insulated with vacuumed ber. The inner shell and pipeline are made of
austenitic stainless steel, and the outer shell of low alloy steel. The
support between the inner and outer shells is epoxy glass berreinforced plastics, which are suited for providing thermal insulation at cryogenic temperatures.
Since LNG is a combustible liquid, the truck is equipped with
such safety facilities as an emergency shutdown switch, a quick
melting plug, reproong equipment, a nitrogen ashing- and
lling system, grounding, and a re hydrant.
The sizes of LNG tank containers fall into three types by volumetric capacity: 17.5 m3, 40 m3 and 43.9 m3. They have high
vacuum multi-layer insulation that provides good insulation. They
are also capable of long-term ventless storage while boasting of
very lightweight. LNG tank containers provide exible modes of
transportation, either by road, water, railway or combinations
of the three, and can be used directly as storage tanks.
2.3.2. LNG carrier
LNG ships are considered high-tech products with high-added
value, which were only built so far in Japan, Korea, and several
European countries. China has invested more than 100 million CNY
in research and technology development over the past few years in
order to gain a share in the global LNG market. This commitment
and efforts led to the countrys rst contract for LNG carriers in

Table 3
Summary of LNG receiving terminals in China.
Province

Location

Capacity (Mt/a)

Main owner(s)

Operation

Status

Liaoning
Hebei
Tianjian
Shandong
Jiangu
Shanghai
Zhejiang
Fujian
Guangdong
Guangdong
Guangxi
Hainan

Dalian
Tangshan
Tianjin port
Qingdao
Rudong
Yangshan port
Ningbo
Putian
Shenzhen
Zhuhai
Beihai
Wenchang

3.5
3.5

CNPC
CNPC
Sinopec
Sinopec
CNPC
Shenergy/CNOOC
CNOOC
CNOOC
CNOOC/BP
GDYD/CNOOC
CNPC
CNOOC

2011
2012

Full feasibility study

Full feasibility study
Pre-feasibility study
Full feasibility study
Full feasibility study
Under construction
Full feasibility study
Construction completed
Built
Full feasibility study
Not in progress
Not in progress

3.3
3
3
3
2.6
3.7
3.4

After 2010
2011
2009
After 2010
2008
2006
2012

Note: CNPC China National Petroleum Corporation, Sinopec China Petroleum and Chemical Corporation, CNOOC China National Offshore Oil Corporation,
GDYD Guangdong Yudean Group Co. Ltd.

W. Lin et al. / Energy 35 (2010) 43834391

August 2004. The Shanghai Hudong-Zhonghua Shipbuilding Group

now shares an order for ve LNG vessels.
The construction of the rst two LNG carriers worth $400
million was completed and they were delivered to the buyer in
April and July 2008, respectively. These events symbolize the
Chinese ship manufacturing industrys entry into a brand-new
technological eld. Both carriers are GTT No. 96 type with
a capacity of 147,200 m3, and are 292 m long, 43.35 m wide. The
cryogenic inner wall is supported directly within a double layer
shell composed of two layers of lms made of the same material
and two independent insulating layers. The inner wall is made of
0.7 mm non-expansion type steel (36% Ni alloy steel).
2.3.3. Energy losses due to transportation
Unlike coal and oil, which remain almost the unchanged after
long distance transportation, LNG may suffer some losses in
transportation.
For large LNG carriers, the evaporation rate is usually between
0.05 and 0.1%/d. Assume that the LNGC (LNG carrier) has the
capacity of 150,000 m3, and it is a 10-day voyage, the total boil-offgas (BOG) will reach 45,000w90,000 Nm3. The BOG may be
consumed by the carrier itself, causing loss of LNG due to transportation. Otherwise, the BOG may be re-liqueed. In this case, LNG
may remain its initial quantity, at the expense of power
consumption for liquefaction and the initial cost of the liquefying
facilities.
For LNG transported by land vehicles, it is usually stored in
cryogenic pressure vessels. Although heat leakage into the vessels
may cause LNG vaporization at the rate of about 0.5%/d, the
vaporized natural gas is retained in the vessels. As long as the
pressure in the vessel does not exceed its design pressure, there is
product loss during transportation.

4387

Zhongyuan Green Energy Science and Technology Company

conducted research into LNG-powered buses jointly with Beijing
municipality. The results showed that LNG vehicles score over
others in the following seven aspects: (1) the construction of LNG
fueling stations is not affected by the natural gas system and is easy
for networking sites; (2) longer driving distances of LNG vehicle
than that of CNG (compressed natural gas) vehicle, each refueling of
LNG vehicle can support trips of 400600 km, almost triple of the
driving distances of CNG vehicle; (3) LNG fueling stations require
less land, do not need large-scale power equipments, noise level is
low, and are suitable for urban locations; (4) convenience of storage
and transportation, economical; (5) easy loading and the same
driving requirements as for conventional vehicles; (6) LNG is free of
possible solid matter produced during the deep cryogenic process,
and, therefore, is more puried and environment-friendly; (7) LNG
can be evaporated directly into CNG and used to refuel CNG vehicles.
Sponsored by the Shanghai Science and Technology Department, a prototype bus powered by LNG has developed by Shanghai
Jiao Tong University and Shanghai Sunwin Bus Corporation. LNG
buses are robust, powerful and conform to the European III Emission Standards.
At present, LNG-fueled vehicles are running on the streets of
Beijing, Urumchi (Xinjiang), and Changsha (Hunan).
China has a long history of adopting NGV (natural gas vehicle).
In cities of the western provinces, where natural gas is cheap,
drivers tend to convert their gasoline-fueled vehicles into natural
gas-fueled ones. With the domestic availability of LNG fuel tanks,
the cost of an LNGV (liqueed natural gas vehicle) becomes only
marginally higher than a gasoline-fueled vehicle. As the oil price
keeps rising, the alternative of an LNGV is becoming competitive
even in the eastern provinces. What restrains the development of
LNGV is not the cost of the vehicle or the price of LNG, but the
unavailability of enough LNG resources.

2.4. LNG applications

2.5. LNG standards
2.4.1. LNG satellite stations
More than 10 LNG satellite stations, which receive LNG from
LNG plants such as Zhongyuan and Guanghui have been built.
Take the Suzhou LNG satellite station as an example. It has the
following functions: (1) LNG unloading and storage; (2) regasication, regulation, blending with water gas and coal gas, and
transportation to city pipelines; (3) LNG loading and transportation
to community gas stations and LNG vehicle fueling stations. So far,
the rst two functions have been realized.
The station has a gas supply ability of 20,000 Nm3/d. The future
gas supply ability will be 30,000 Nm3/d and will cover the gas for
the community and LNG vehicle refueling. The peak supply volume
is 1200 Nm3/h.
The main facilities of the satellite station are as following: (1)
two cryogenic tanks, of 100 m3 each, the space between inner shell
and outer shell is vacuumed and lled with pearlite; (2) two
pressuring evaporators which help to pressurize and discharge
uids in the tank, the output gas rating is 150 kg/h; (3) two airheated evaporators and one steam-heated evaporator, each of
which has a production rating of 600 Nm3/h; (4) a BOG heater
which can produce 400 Nm3/h of natural gas.
2.4.2. LNG vehicles
To reduce the air pollution brought about by waste emission
from fuel cars, China is positively accelerating the research on LNG
vehicles. The Clean Vehicle Plan initiated by the National Ministry
of Science and Technology proposes a demonstration project of
LNG-powered buses. The project is intended to extend the application of LNG to cars in China and to encourage the development of
domestic LNG vehicle technology.

A few years ago, it was often embarrassing to discover that there

were almost no suitable Chinese standards and regulations when
an LNG project had to be designed and constructed. Now things
have changed. Some new standards have been proposed while
some previous standards have been revised to include LNG related
topics. This is very important for safe operation of LNG facilities.
Here is a brief review of some LNG related standards.
(1) JB/T 4780-2002: Tank containers for liqueed natural gas.
(2) GB/T 19204-2003: General characteristics of liqueed natural
gas.
This standard details the general characteristics of LNG, as well
as cryogenics materials employed in the LNG industry. It also
outlines the guidance on health and safety relating to LNG. It
references the international standard EN 1160-1997.
(3) JTJ 304-2003: Design regulation for liqueed natural gas
wharves.
(4) GB50183-2004: Fire prevention standards for design of oil and
natural gas projects.
A new chapter was added in this version to deal with LNG issues.
It denes the layout-, spacing-, re prevention-, and safety
requirement of LNG stations.
(5) QC/T 755-2006: Technical specications of special equipment for
LNG vehicles.
(6) QC/T 754-2006: Testing regulation for LNG vehicle approval.

4388

W. Lin et al. / Energy 35 (2010) 43834391

(7) GB/T 20734-2006: Installation requirement of special equipment

for LNG vehicles.
(8) GB/T 20603-2006: Refrigerated light hydrocarbon uids
Sampling of liqueed natural gas Continuous method.
(9) GB50028-2006: Design standards for city gas.
A new chapter on LNG supply was added in this version. It
mainly includes the requirements of re prevention spacing
between LNG tanks in the regasifying station and buildings outside
the station, re prevention spacing for the layout of the station, and
re prevention equipment.

(10)GB/T 20368-2006: Production, storage and handling of liqueed

natural gas (LNG).
This is a comprehensive LNG standard adapted from the wellknown US standard NFPA 59A-2001.
There will be 24 standards included in the series of LNG standards planned, some of which have been issued and are listed
above. These standards fall into four categories: general/product,
analysis and instrumentation, production and storage, HSE
management. Besides the standards already issued, the others will
follow in the near future.
In general, those entrusted with developing Chinas standards
tend to maintain consistency with international equivalents. More
and more well-known international standards are directly adopted
as Chinese standards.
The situation is almost the same in the LNG eld. The LNG
related standards listed above have no major differences with their
corresponding international equivalents. Whereas, due to total
absence of LNG practices in the past, there are still some requirements that tend to be stricter than those prevailing in the international standards are. Take GB/T 20368-2006 as an example; this
is the same as the NFPA 59A-2001. In this standard, the safety
distance between an LNG site and nearby residential and public
facilities is not dened by specic measurements. However, GB/T
20368-2006 is a recommendatory standard in China. In the
mandatory standard GB50183-2004, the distance for an LNG site
with storage capacity equal to or larger than 30,000 m3 is set as
greater than 500 m. The requirements in GB50183-2004, instead of
GB/T 20368-2006 must be met when constructing an LNG facility.
3. New aspects of LNG in China
3.1. Small-scale LNG plant
Cryogenic liquefaction plants have been utilized in the
commercial natural gas liquefaction eld where liquefaction
capacities are very large. For instance, the capacity of single product
line of base load LNG plant goes up to 3.4 Mt/a, and that of the peakshaving LNG plant is about 0.9 Mt/a. Cryogenic liqueers are
commercially available for natural gas liquefaction. These liqueers
are normally custom-made, permanent large capacity plants
intended for natural gas utility peak-shaving and transcontinental
natural gas shipping. The developing market for natural gas vehicles
provides an opportunity for LNG and L-CNG fueling stations. Other
markets for smaller-scale LNG liqueers include onshore gas wells,
customer sites that are remotely situated from current gas pipelines,
and industrial customer peak-shaving installations. Continued
commercial development of LNG vehicles creates opportunities for
developing small-scale natural gas liquefaction plants.
Comparing with medium-sized or large-scale liquefaction
plants, the key characteristics of small-scale ones are simple
process, low investment, miniature size, and skid-mounted

packages. Almost all types of liquefaction processes can be adopted

in small-scale LNG plants, so it is not always easy to select the most
suitable process for a given project. Investigations indicate that the
expander cycle precedes the mixed-refrigerant cycle on the
premise of lacking propane pre-cooling. The role of propane precooling is very important in the mixed-refrigerant cycle. It should
be considered for its energy saving characteristics in the development of small-scale natural gas liquefaction processes for skidmounted packages [9].
The small-scale LNG plant is a type that is suitable for adoption
in China for stranded natural gas. It is widely accepted that the
expander cycle is a good choice for the small skid-mounted package
for its simplicity and exibility. However, it is worthwhile to carry
on more work on the MRC cycle, the dominant one for large base
load plants because of its energy efciency, which consumes only
60w80% power compared to the expander cycle.
3.2. LNG cold energy utilization
LNG is a mixture of cryogenic liquid (162  C) produced by
cryogenic refrigeration and liquefaction processes. It takes about
850 kWh of electricity in power plants and public facilities to
produce 1 tonne of LNG; while at LNG receiving terminals, it needs
to be evaporated through vaporizers before being put to use. During
the evaporation process, it releases a large amount of cold energy
(about 830 kJ/kg). Cold energy from LNG can be utilized through
certain processes to recover energy and enhance economic
performance. Studies indicate that the LNG cold energy can be used
in power generation, food storage, air liquefaction, dry ice
production, and cryogenic pulverization. The technology of LNG
cold utilization should be utilized in Chinas current effort to build
LNG receiving terminals.
3.2.1. Air separation
In the thermodynamic point of view, air separation is almost the
best way to utilize LNG cold energy, because the exergy contained
in the cold liquid can be efciently utilized in the air separating unit
(ASU).
A joint venture between CNOOC and Air Products and Chemicals
Incorporation has been set up to build an ASU utilizing LNG cold
energy for the Putian terminal. The ASU project is scheduled to be
completed in April 2009. It consumes the cold energy contained in
the 50w70 t/h LNG ow, approximately 10w18% of total LNG ow.
The estimated cost of the ASU project is about 215 million CNY. The
investment is estimated to be recovered in 8.64 years.
The Ningbo LNG terminal has not started operation yet, but land
is reserved for an ASU project, which will be very similar to that of
the Putian terminal.
The Shenzhen and Shanghai terminals are also considering the
possibility of building ASUs to recover LNG cold energy.
3.2.2. Power generation with CO2 capture
With a properly designed thermal power cycle using the LNG
evaporator as the cold sink, the cryogenic exergy from LNG
evaporation process can be withdrawn for power generation.
Power generation from fossil fuels, however, is also an important
source of greenhouse gas emissions. The conventional CO2 capture
technologies such as chemical/physical absorption, adsorption,
membrane- and cryogenic separation, are all energy-consuming
processes. The LNG deep low storage temperature makes it a very
good cold sink for both power plants and CO2 cryogenic separation. Zhang and Lior [10] proposed a novel zero CO2 emission
power system. The plant is operated by a CO2 quasi-combined
two-stage turbine cycle with natural gas burning in an enriched
oxygen and recycled-CO2 mixture (see Fig. 4). By integrating with

W. Lin et al. / Energy 35 (2010) 43834391

4389

Fig. 4. LNG-fueled power plant with CO2 recovery.

the LNG evaporation process, the CO2 condensation and cycle heat
sink are at temperatures much lower than ambient. In addition,
the combustion-generated CO2 is separated from the main
working uid without additional energy consumption. This cycle
has both high power generation efciency and extremely low
environmental impact.
Funded by Statoil, the University of Pennsylvania, Institute of
Engineering Thermophysics of Chinese Academy of Sciences, and
Shanghai Jiao Tong University are working to improve the abovementioned cycle. The research aims to analyze the possibility of
building such a power plant at Shanghai LNG terminal.
3.3. Liquefaction of coal bed methane
On one hand, China has the third largest coal bed methane
(CBM) resources in the world. The total reserves are about
36,000 bcm, almost the same quantity as its natural gas reserve. On
the other hand, CBM explosions cause 7080% of the coalmine
accidents in China. In addition, coal-related methane emissions do
great harm to the environment, because methane is a powerful
greenhouse gas with a greenhouse warming potential (GWP) of 21.
Recovery of CBM has vital importance not only for energy utilization, but also for safety and environment protection.

At coalmines that are not close to natural gas networks and

where the CBM production is not very large, liquefaction of CBM is
a good recovery option [11]. For CBM with high nitrogen content,
enrichment of methane is needed. Methane enrichment can be
achieved in two ways. The rst is to separate nitrogen from CBM
and then liquefy the enriched gas. The second method is to rst
liquefy CBM, and then separate nitrogen by distillation.
Funded by the National Hi-Tech R&D Program (863 Program),
Shanghai Jiao Tong University, together with Chongqing University,
is carrying on research work on coal bed methane liquefaction [12].
Both the liquefaction-distillation process and the adsorptionliquefaction process will be analyzed carefully.
Coalmines in China are interested in liquefaction of CBM. The
CBM liquefaction plants may be installed in Shanxi, Anhui, Liaoning, Chongqing, etc. China Gas from Hong Kong will build the rst
coal bed liquefaction plants in Shanxi province, with the capacity of
about 250,000 Nm3/d.

3.4. LNG-FPSO
Much natural gas reserves are under the sea. In 2003, the
production of offshore natural gas reached 685.6 bcm, a quarter of

4390

W. Lin et al. / Energy 35 (2010) 43834391

total natural gas production of the world. It is predicted that more

and more natural gas will be produced offshore.
With the realization of large oating production, storage, and offloading (FPSO) facilities for oil production and more recently for LPG
production, an LNG-FPSO project appears to be increasingly likely in
the future. Offshore natural gas liquefaction has different process
requirements from the traditional on-land base load plants [13].
China has large sea area, and the reserve of natural gas under the
sea is huge. Therefore, it is natural for China to develop LNG-FPSO.
Funded by the National Hi-Tech R&D Program (863 Program),
and also by CNOOC, Shanghai Jiao Tong University is carrying out
research work on small-scale LNG-FPSO. Main areas include
selecting processes suitable for FPSO, heat, and mass transfer
equipment to withstand movement, sloshing, and LNG transmission [14].
3.5. Domestic design and production of equipment
in LNG industrial chain
There are various equipment involved in the LNG industrial
chain, for example, compressors, expanders, pumps, heat
exchangers, valves, etc. Advancing the domestic design and
production of such equipment is critical to further lowering cost
and enhancing LNG technology in China.
The compressor is the key equipment for pressure boosting and
transmitting gas used in small-scale LNG plants. There are three
types: reciprocating cycle, centrifugal cycle, and axial-ow.
Compressors used in LNG plant should pay enough attention to the
combustible character of gases. No leakage is allowed and explosion prevention facilities are required in electrical and driving parts.
Designs for compressors working under deep cryogenic conditions
should also take into account the effect of cold on the performance
of component materials. In addition, the freezing of grease oil
should not be ignored. Natural gas compressors can be manufactured in China now, with almost the same efciency as foreign
brands. However, it has not yet been possible to produce some
special kinds of compressors such as compressors for boosting BOG
at cryogenic temperatures.
Heat exchangers are an important part of LNG plant in the
liquefaction process and in liquidgas transfer. When used in LNG
industry, they mainly take the form of spiral-wound and plate-andn heat exchangers, which have been widely used in cryogenic
liquefaction and air separation units. Chinese heat exchanger
manufacturers are able to produce cryogenic plate-and-n heat
exchangers for pressure up to 6w7 MPa. In the case of higherpressure levels, such as heat exchangers for LNG cold energy
utilization at terminals delivering natural gas at pressure up to
10 MPa, heat exchangers still need to be imported. The spiralwound heat exchanger is still unavailable in China.
In LNG systems, there is another type of heat exchanger specially
used for regasifying LNG, which is usually called vaporizer. It varies
in types with different working conditions, heating methods,
and the scale of gasication. For example, the heating method can
be divided into air heating, seawater heating, combustion heating
etc. Vaporizers for LNG satellite station are now widely manufactured in China, but open rack vaporizers (ORVs) in large receiving
terminals need to be imported.
Besides pressure transportation, LNG transportation processes
must use LNG pumps under mass transportation and high pipe
pressure loss conditions. LNG pumps not only require to be used at
cryogenic temperatures, but also require high sealing performance
and guaranteed electrical safety. There are special requirements for
the structure and material of the pumps to ensure the safe transportation of combustible cryogenic media. Theres a kind of
submersible electrical pump installed in a sealed tank, which is

widely used in LNG systems. In addition, some conventional

centrifugal pumps can also be used in LNG transportation after
improvement in sealing structure and material. Chinese companies
are now trying to develop LNG pumps; some of them have begun to
produce some small-scale LNG pumps, especially those used in LNG
fueling stations.
The expander is the key equipment needed to obtain low
temperature in LNG plants. In general, the turbo-expander is the
most commonly used equipment in LNG plants. Chinese companies
have experience in supplying expanders for air separation units,
but they are relatively short of experience in natural gas practices.

3.6. LNG price and energy security

LNG price is of vital importance when LNG competes with other
energy resources, such as pipeline natural gas and oil.
For domestically produced LNG from the small-scale LNG plants,
it is unlikely that this kind of LNG can compete with pipeline
natural gas. However, China is so large a country that many regions,
even some rich areas in southeastern China, have no supply of
piped natural gas. This explains why LNG produced in northwestern Xinjiang province has to be transported several thousands
of kilometers to the southern Guangdong province, at a price more
than twice that in pipeline connected areas.
The situation is different for imported LNG, which must face the
competition from both pipeline natural gas and oil. The price of
imported LNG has been changing very fast these years. The
Australian LNG price for the Shenzhen Dapeng terminal, the rst
one in China is only 3.15USD/MMBTU, roughly 0.80 CNY/Nm3. The
Malaysian LNG price for the Shanghai terminal, the third one in
China, is about twice that of the Shenzhen one, roughly 1.60 CNY/
Nm3. The retail price of natural gas in Shanghai is now 2.10 CNY/
Nm3, and that means little prot for the LNG company, unless the
price of natural gas increases.
Unlike the relatively steady natural gas price, oil price varies
signicantly with that in the international oil market. The retail
price of gasoline is now 6.05 CNY/L in Shanghai that means natural
gas is cheaper than gasoline. This will continue to be true if the oil
price stays high.
As large countries, such as India and China began to import LNG,
the price of LNG has increased considerably. The traditional large
LNG consumers, such as Japan, Korea, and the United States, will be
sure to continue to import more and more LNG. The demand from
the new large consumers will denitely continue to rise. It can be
foreseen that the world LNG market will soon change from a buyers market to a sellers one. The LNG price is unlikely to decrease in
the future.
As LNG price rises, China slows down its policy to construct new
LNG receiving terminals. While this may have some substantial
inuence on the decision of some terminals in the northern provinces, it has little inuence on the appetite for LNG in the southern
provinces. Global oil and gas companies, such as Shell [15], believe
that the demand for LNG in Asia Pacic area will continue to rise.
Therefore, the question is not if China will import more LNG. The
question is how to insure Chinas energy security in the presence of
LNG. China will consume more and more natural gas. Imported LNG
will meet some of the demand, more should be met from domestic
resources, including offshore natural gas and coal bed methane.
LNG should be imported from different suppliers in the world to
guarantee secure- and inexpensive supply.
Due to constant war-like situation in the Middle East and its
long distance from China, the risk of importing LNG from Middle
East countries is relatively higher. Fortunately, unlike oil, there are
some alternative LNG suppliers in the Asia Pacic area.

W. Lin et al. / Energy 35 (2010) 43834391

Safety is another important issue related to energy security. In

fact, the LNG industry is proud of its safety record, which spans over
40 years. After over 35,000 ocean voyages, LNG has proved itself as
a kind of safe energy resource with no severe accidents recorded.
The only signicant accident may result from rollover of LNG in
large tanks. This phenomenon has been studied and measures have
been proposed to prevent stratication and rollover in LNG tanks.
Other possible accident types like leakage of LNG into water or soil,
as well as vapor clouds of LNG, have also been studied intensively,
although they have never occurred before.
Public acceptance is also very important for the development of
LNG industry in China. Because few people know thoroughly about
LNG, public education is important for their acceptance of LNG and
the related facilities. Fortunately, there has never been such strong
resistance as in the United States. Chinese public tend to accept
these types of new energy resources.
4. Conclusions
The LNG industry is relatively new in China. To meet the
increasing demand of natural gas, China needs to build about 10
large LNG receiving terminals, and to import LNG at the level of
more than 20 bcm per year by 2020.
While small-scale LNG plants may sell out their expensive LNG
product, large-scale LNG receiving terminals must keep their
purchasing price below a reasonable level, say 6USD/MMBTU, to
face the competition from piped natural gas and oil.
There are many new aspects in Chinas LNG industry, such as
small-scale liqueers, LNG cold energy utilization, coal bed
methane liquefaction, LNG plant on board FPSO. While some of
these have been utilized in industry, the others may be useful for
future LNG practice.
LNG codes and standards are being established in China. These
standards must be reference as much as possible to corresponding
international equivalents.
While LNG is contributing to Chinas multi-energy resource
structure to promote energy security of the nation, LNG supply
itself must be secure. When deciding LNG suppliers, it is wise to
avoid politically sensitive areas and to choose suppliers situated not
too far away from China.

4391

Safety is an important issue even if the LNG industry has a rather

good safety record. Public education is also very important for
acceptance of LNG and related facilities.
The future is clear. LNG, the clean, efcient, and safe energy
resource, is denitely remain as a necessary part in Chinas future
energy infrastructure.
References
[1] BP. BP statistical review of world energy June 2007. London: BP p.l.c, 2007. See also:
http://www.bp.com/productlanding.do?categoryId6848&contentId7033471.
[2] Wang XY, Luo YX, Long G, Zhou ZB. Research on Chinas natural gas supply
. China Energy
security strategy
Resources 2006;28(2):235 (in Chinese).
[3] Wang ZH, Le Bris P, Mulot Y, Raillard J-C. First industrial LNG production in
China. In: The 13th International Conference & Exhibition on Liqueed Natural
Gas, Seoul, Korea: GTI/IGU/IIR; 2001.
[4] Cao WS, Lu XS, Gu AZ, Shi YM, Wang RS. Work ow of LNG plants in China
.
Natural
Gas
Industry
2005;25(5):1002 (in Chinese).
[5] Berger E, Xiang D, Jin GQ, Meffert A, Atzinger L. LNG baseload plant in
Xinjiang, China commercialisation of remote gas resources for an ecoresponsible future. In: Proceedings of the 22nd World Gas Conference, Tokyo,
Japan: IGU; 2003.
[6] Price BC. Small-scale LNG facility development. Hydrocarbon Processing
2003;82(1):379.
[7] Chu YQ, Hicks LC, Lu NX. Chinas rst LNG import terminal. In: The 14th
International Conference & Exhibition on Liqueed Natural Gas, Doha, Qatar:
GTI/IGU/IIR; 2004.
[8] Miyamota A, Ishiguro C. Pricing and demand for LNG in China. Oxford: Oxford
Institute for Energy Studies; 2006.
[9] Cao WS, Lu XS, Lin WS, Gu AZ. Parameter comparison of two small-scale
natural gas liquefaction processes in skid-mounted packages. Applied Thermal
Engineering 2006;26:898904.
[10] Zhang N, Lior N. A novel near-zero CO2 emission thermal cycle with LNG
cryogenic exergy utilization. Energy 2006;31(1011):166679.
[11] Lin WS, Gu M, Gu AZ, Lu XS, Cao WS. Analysis of coal bed methane enrichment
and liquefaction processes in china. In: The 15th International Conference &
Exhibition on Liqueed Natural Gas, Barcelona, Spain: GTI/IGU/IIR; 2007.
[12] Gao T, Lin WS, Gu AZ, Gu M. CBM liquefaction processes integrated with
adsorption separation of nitrogen. In: Proceedings of ASMEs 2nd Energy
Sustainability Conference, Jacksonville, USA: ASME; 2008.
[13] Barclay M, Denton N. Selecting offshore LNG processes. LNG Journal
2005;10:346.
[14] Gu Y, Ju YL. LNG-FPSO: Offshore LNG solution. Frontiers of Energy and Power
Engineering in China 2008;2(3):24955.
[15] Chadwick J. LNG in Asia Pacic: the tiger of many stripes. In: The 15th International Conference & Exhibition on Liqueed Natural Gas, Barcelona, Spain:
GTI/IGU/IIR; 2007.