Lanqiao, China’s largest privately owned port, has signed an agreement with state-owned Beijing Energy Holding to invest CNY6.7 billion (USD973 million) to construction a liquefied natural gas (LNG) receiving station.
Owned by an eponymous corporate group whose English name is Landbridge Holdings, Lanqiao is in the Lanshan administrative region in Shandong Province, south of Rizhao. Built on reclaimed land, Lanqiao port began operating in 2009 and primarily handles dry bulk cargoes and also has an oil terminal.
The LNG terminal will be able to load and discharge 5 million tonnes of LNG every year.
Wood Mackenzie predicts that China will overtake Japan as the world’s largest LNG importer by 2022, with imports expected to reach 74 million tonnes, although disruptions to China’s LNG demand are expected as a result of lower consumption caused by the coronavirus disease 2019 (COVID-19) outbreak early this year.
Landbridge’s other businesses include infrastructure development and petrochemical production. The Chinese group has acquired Australian coal-seam gas producer WestSide and the rights to operate Darwin port in Australia for 99 years from 2015.
Beijing Energy Holding offers integrated energy services, including electricity generation, heating supply, and coal production services. Beijing Energy Holding is also active in real estate development, energy saving, and securities businesses. Through an agreement with Western Australia Energy, Landbridge is also building natural gas production bases in Western Australia.
Landbridge said: “Landbridge and Beijing Energy Holding have a high degree of industrial compatibility, strong complementarity, and a large space for integration and development. Upstream of the industrial chain, Landbridge has overseas natural gas sources, and our oil and gas fields in Western Australia have huge reserves.
“Downstream of the industrial chain, Beijing Energy Holding has the largest heating network in Asia and is the largest gas-fired power supplier in Beijing. With the advantages of our rich energy resources, Landbridge Group, combined with Beijing Energy Holding’s huge gas and heating market will jointly build an upstream and downstream integrated industrial co-operation in the exploitation of energy resources. This can lay a solid foundation for ensuring energy security in the capital.”
Landbridge is reportedly considering a public listing in order to finance its expansion. Lanqiao port processed 80 million tonnes of cargo in 2018 and is projected to have handled 100 million tonnes in 2019.
As part of China’s Belt and Road project, Landbridge is also developing a USD1 billion deep-water port and container terminal at Panama’s largest port at Margarita Island, having purchased the land in May 2016.
According to the agreement signed by Beijing Energy Group and Lanqiao Group, the two parties will also carry out in-depth co-operation in the development of overseas energy projects, the construction of industrial parks at home and abroad, and international trade in oil and gas.