October 29 witnessed the berthing of the LNG vessel named Dapeng Princess in PipeChina Yuedong Terminal, marking that Dongguan Daosen Natural Gas received its 4^th spot cargo over this year. This LNG cargo was the first cargo that DXT Commodities cooperated with 2-tier players in China and is also the first time for Dapeng Princess owned by Shenzhen Gas to come back to China.

Earlier on September 11,  2024, Dongguan Daosen Natural Gas imported its first spot LNG cargo via PipeChina Yuedong over 2024. It has been muted in the interntional spot LNG market after the spot LNG import in 2021 via PipeChina Diefu. Apart from Dongguan Daosen Natural Gas utilizing PipeChina Yuedong Terminal, other bookers mainly cover ENN, CNPC. This year, Dongguan Daosen Natural Gas has imported a total of 4 spot LNG cargoes for arbitrage between spot LNG import prices and domestic trucked LNG prices, namely spot LNG prices DES China plus $1.5/MMBtu cost to compete with China’s ex-terminal prices. The $1.5/MMBtu covers 9% VAT* after refund coupled with the $1.1/MMBtu operating cost.

For 9% VAT*, it has been unchanged since Apr 2019. There is a VAT refund, but this procedure is not real-time and can be delayed by at least 3 months. 20 out of 31 terminals enjoy 9% VAT refund. In addition, 8 terminals are not approved by the NDRC and Provincial DRC: CNPC Shennan, PipeChina Fangchenggang, Jovo Dongguan, Guanghui Qidong, Shenergy Wuhaogou, Hangjiaxin Jiaxing, Guangzhou Gas Nansha, Shenzhen Gas Hua’an. 3 terminals are approved by the NDRC and Provincial DRC but came online after end-Jun, so they may see a refund in the future: PipeChina Zhangzhou, GEG Huizhou and Huaying Chaozhou. For the refund ratio, it means that only pay 9% VAT for $0.37/MMBtu cargoes.

For operating cost, it varies, depending on terminal construction cost, scale, utilization rate, etc. Overall speaking, $0.7/MMBtu is a low cost, and $1.1/MMBtu is an average cost. PipeChina charges $0.7-1.3/MMBtu operating cost, namely terminal service fee, unchanged since 2020 except PipeChina Beihai in Jun 2024. As an open and fair company, PipeChina tries to advance marketization instead of earning money. Tier-2/3 players rent slots of terminals, with the same service fee.

PipeChina Terminal Service Fee

Unit: RMB/cbm