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Gas & Power

As a member of Global Compact and a main driver of “energy revolution”, CNOOC actively carries out low-carbon action and responds to the Paris Agreement to build a clean, low-carbon, safe and efficient energy system. Natural gas and power generation segment has become an important part of the mid- and downstream business of the Company. Accelerating the development of natural gas and power generation is in line with the restructuring of national energy consumption, but also the most promising profit-making business.

CNOOC Gas & Power Group is deeply aware of the role of natural gas as key low-carbon and clean energy. The Group continued to concentrate on the Yangtze River Delta, the Pearl River Delta and the Bohai Bay Area, optimize the layout of the industry, extend natural gas supply network and actively builds LNG receiving terminals, natural gas pipelines and gas stations, striving for building up the coastal natural gas pipeline network to enhance supply capacity of clean energy and promote sustainable development in the surrounding areas.

By the end of 2017, CNOOC had developed the natural gas business in 18 provinces and 70 prefecture-level cities, built 9 LNG receiving terminals with the LNG receiving capacity up to 33.8 million tons per year, 170 gas stations and 4,662 km of land natural gas pipeline and accumulated 21.3 billion kWh of power.

The Group developed the synergistic effects of industrial chain, innovating the conventional ways of thinking and marketing means to enlarge the market space for incremental supply and strengthen the competitive advantages on the traditional market. In 2017, the Group achieved rapid growth of sales of gas in all regions with the annual sales of 34.15 billion m3, consolidated the second largest natural gas supplier in China with the LNG imports of 20.46 million tons and maintained the leading position in the domestic LNG industry.

The Group continued to innovate operation to rapidly enhance its market development capability. The Group integrated itself into the Internet era through entering the terminal market and building the flagship store for CNOOC natural gas business. Owing to a series of promotional activities, 371 customers registered online and the online transaction amount reached RMB 2.63 billion in 2017, which effectively promoted the initiative of the Group in sales channels. The Trading Company led a pilot project of introducing the public bidding mechanism to East China market in cooperation with Shanghai Petroleum and Natural Gas Exchange. As the mechanism was for the first time applied in China, the Trading Company played a leading role in the industry and set a good example of reform for the society.

The Group continues to promote technological innovation and enhance the driving force for development. The three self-developed technical pillar brands, natural gas liquefaction, LNG receiving terminals and large-scale storage tanks, keep expanding influences on the markets. Through enhancing synergistic innovation, the Group won the bidding for the Shanghai 200,000 m3 LNG storage tank engineering project, the largest LNG storage tank in China. The technology used in the project has broken several foreign technical monopolies and become a milestone in the domestic LNG storage tank construction. The technology was also successfully applied to the construction of 3 storage tanks of 160,000 m3 capacity respectively in Tianjin and Fujian. The Group also won the bidding for the Xi’an 1.4 million tons liquefaction engineering project of Shaanxi Gas Group, the largest liquefaction project in China, indicating that the self-developed million-level liquefaction process stepped into the application phase. The Group won the CWC LNG Technological Innovation Award 2017 and became the first Chinese company to win the award.

The Group adheres to the responsibility of the central enterprises and ensuring the people’s livelihood, intensified the resource scheduling, fully excavate the supply potential and helped stabilize the market price. On the basis of scientific forecast on the huge demand for natural gas in the winter of 2017, the Group settled arrangements in advance, including purchasing and stocking millions of tons of LNG, coordinating upstream resource sellers and optimizing shipment date to ensure the availability of more than 20 billion m3 of natural gas for the winter. In addition, CNOOC leased a FSRU and let it berth at Tianjin LNG Receiving Terminal. The FSRU provided an additional capacity of supplying 14 million m3 per day to Beijing-Tianjin-Hebei region. Another two LNG carriers were leased and ordered by CNOOC to wait at sea for further instructions, which also enhanced regional reserve and supply capacity for emergency. The Group also promoted the inter-connection of gas pipelines operated by CNOOC, CNPC and Tianjin Binda and organized 250 tankers to carry natural gas “from South China to North China” to create and expand a channel for emergency supply. The Group supplied a total of 20.7 billion m3 of natural gas in the winter of 2017. Furthermore, in the face of the sharp rise of the LNG price, the Group strengthened self-discipline, took the initiative to stabilize the LNG price and maintained the market order with others. As a result, the price fluctuation of liquid resources was limited between RMB 4,500-5,100 per ton.

The Group remained the natural gas power generation in safe and steady operation. It took the activity of “culture of intervention in safety” as a special means to improve the safety consciousness of all employees and helped them transform the safety idea from “I am asked to be safe” to “I want to be safe”. Its subordinate power plants continuously optimized operation modes and inspection and maintenance, actively tried new ways of energy saving and tapped latent potentialities. Thus all economic indexes were improved.

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CNOOC Annual Report 2017
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