South China Morning Post: Opportunities Emerge for Private Firms to Enter China's LNG Market

There were no half measures when China embarked just over a decade ago on a policy of putting liquefied natural gas at the heart of the country's push to diversify its energy sources.

The clean-burning fuel, created by cooling natural gas to minus 160 degrees Celsius, was championed as an alternative to a decades-long reliance on the use of coal and petroleum that brought choking smog to the mainland's cities. But with a liquefication or regasification facility costing tens of billion dollars to build, the development of the industry became the exclusive turf of the state-owned energy giants.

Beijing added LNG to the national energy strategy with a clear aim to control the supply chain - unlike the case with crude oil imports. That quest started in 2002 when China National Offshore Oil Corp (CNOOC) struck long-term contracts for gas supplies from Australia's North West Shelf project and from the Tangguh field in Indonesia.

China has since paid hundreds of billions of dollars for long-term supply contracts and equity stakes in foreign gas fields, as well as undertakings to build regasification facilities at home and to set up and operate a national fleet of LNG carriers with help from partnerships with energy leaders such as ExxonMobil and BP and Japanese shipping operator Mitsui OSK Lines. MORE