Sinopec – China LNG Agree to Develop HD Truck LNG Fuel Market

Sinopec – China LNG Agree to Develop HD Truck LNG Fuel Market

China LNG Group Ltd has issued a statement declaring the Company and Sinopec Fuel Oil Sales Corporation Limited (Shanghai) have entered into a sales framework with respect to the cooperative development of a liquefied natural gas (LNG) market, the contents of which refers to cooperation on the development of LNG refuelling stations and the application of LNG heavy-duty trucks in the People’s Republic of China.

As a pilot program, the contracting parties intend to select two highways — Ningbo Expressway (G60) (connecting Shanghai and Hangzhou – 151 km) and Pu-Hangzhou Expressway (G15) (connecting Pudong and Hangzhou – 112 km), adding LNG facilities to existing filling facilities. Following successful implementation of such stations, Sinopec will increase the number of LNG fuel stations based on the demand and development of the company’s LNG businesses.

According to the framework agreement, the content of cooperation is as follows:

(1) Sinopec will communicate with relevant government departments regarding application procedures for implementing liquefied natural gas filling facilities at existing stations;

(2) Sinopec will be responsible for project design, construction, equipment installation, testing and commissioning;

(3) Sinopec commits to delivering operational LNG filling facilities within six months of approval by the relevant government departments;

(4) Sinopec will ensure an adequate and stable supply of LNG. Sinopec will sell gas to China LNG Group at a preferential price once sales reach a certain level;

(5) Sinopec agrees to actively report to its Beijing head office to assist China LNG Group expand and develop the company’s liquefied natural gas sales to the greater Shanghai area;

(6) China LNG Group is responsible for actively expanding the liquefied natural gas vehicle market, providing its customers with funding for conversion of heavy-duty trucks and establishing financial lease services for those customers wanting to purchase new LNG heavy-duty trucks . Furthermore, China LNG Group has expressed intent for direct investment in a minimum 100,000 LNG-fuelled trucks and indirect-investment in 200,000 LNG-fuelled trucks by 2020.

(7) China LNG Group will guarantee a minimum number of LNG filling facilities. Specific warranty conditions specified in the agreement will be entered into at a later time.


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