On May 26, 2022, the PRC National Development and Reform Committee (NDRC) issued the “Guiding Opinions on Improving the Pricing Mechanism for Regasification Services at LNG Import Terminals” (Guiding Opinions). The key points of the Guiding Opinions are:
- the mechanism of the regasification service price is changed from government-fixed price to government-guided price;
- the Guiding Opinions are issued to 11 provinces/municipality (including Guangdong, Tianjin, Shanghai, Jiangsu, Zhejiang, Fujian); each province/municipality is encouraged to implement a maximum/ceiling price and publicly disclose its own maximum regasification service price by the end of 2022; the regasification service price should include unloading, temporary storage, regasification of LNG and other related costs;
- the regasification service price should not include the outbound pipeline tariffs;
- an unified pricing mechanism will be used; the maximum regasification service price is required to be established on the basis of the "permitted cost plus reasonable income" method; and
- the maximum regasification service price will be reviewed every three years.
The Guiding Opinions will have impacts on the current and future LNG projects in China, in particular the terminal use arrangements such as the potential third party use of terminals’ spare capacity.
See below for the latest announcement by NDRC:
国家发展改革委关于完善进口液化天然气接收站气化服务定价机制的指导意见 (26 May 2022) (Chinese only)
If you wish to obtain the English translated copy of NDRC's Guiding Opinions, please contact Joanne Du, Nick Kouvaritakis or Sean Prior.