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The
China National Offshore Oil Corporation (CNOOC) has confirmed “the
discovery of a high-quality and high-yield oil” in the Bohai Sea with
proven reserves of natural gas exceeding 100 billion cubic meters. (see RT News)
“The
flow has been discovered in CNOOC’s Bozhong 19-6 gas field, China
Central Televison reported. It is the largest oil and gas discovery in
the Bohai Bay Basin in the past 50 years, and could be used by millions
of city dwellers for hundreds of years, reports the China Daily.
According
to Liu Baosheng, a project manager with the CNOOC, 11 wells have found
oil and gas in the Bohai Sea, and a 12th well has reached 4,700 meters
below the seabed.
Although
the Bohai Oilfield is the second-largest crude oil production base in
China, its discovered reserves in the past 50 years were mainly crude
oil. Until now, few natural gas discoveries have been made due to the
complex’s geological structure.”. (RT News quoting China Daily)
How
will this major discovery in the Bohai sea affect the energy market,
including the configuration of oil and gas pipeline corridors?
The
CNOOC has confirmed that the Bohai natural gas would be directly
transported to major Chinese urban areas through existing pipelines.
According
to the Global Times: “Most domestic natural gas bases are located in
western China, while 70 percent of the natural resource is used in the
central and eastern part of the country”.
The
Bohai discovery will reduce North Eastern China’s dependence on gas
from Western China. It will also have an impact on the import of LNG via
maritime routes.
The
Bohai deposits are close to major urban areas including Beijing and
Tianjin. Dalian is a strategic port in North Eastern China.
China is the world’s largest importer of natural gas and the second-largest of liquified natural gas (LNG).
In January, prior to the CNOOC announcement regarding the Bohai discovery, China announced plans to quadruple its LNG imports.
As of November [2018], Chinese LNG imports are up by a whopping 43 percent year-over-year. Total gas imports have grown by nearly one-third in the same period. (Forbes)
Coupled with the US-China trade war, will the Bohai discovery have an impact on China’s import of LNG from the US?
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Featured image is from Xinhua
