OREANDA-NEWS. July 26, 2012. China’s gas liquefaction capacity will grow by more than 50 percent over the rest of this year but demand for liquefied natural gas (LNG) will remain weak due to an economic slowdown, an energy consultancy told.

China will add 9.16 million cubic meters (MMcm) of daily liquefaction capacity over the remainder of the year, bringing the country’s total capacity to 26.01 MMcm/d, according to analyst Li Lingxuan with Zhuochuang Information.

China’s liquefaction capacity amounts to 16.85 MMcm/d at present, up from 12.71 MMcm/d at the end of 2011, Li previously told.

The increase in LNG production capacity has not been matched by growth in downstream demand, Li said, adding that this would continue for another two to three years.

The sector operated at 69.8 percent of capacity last month and produced an average of 9.4 MMcm/d. Operational capacity fell to 65 percent in the first week of July, with output averaging 9.85 MMcm/d.

The increase will come from the startup of 13 LNG plants and a capacity boost at an existing facility in the Xinjiang Uyghur Autonomous Region. Two of the projects, in Shaanxi Province’s Yan’an City and Jimunai County of Xinjiang, will boast the largest capacity at two MMcm/d each, while the smallest will be a 50 thousand cubic meter per day project in the Inner Mongolia Autonomous Region’s Ordos City.

Construction of the Yan’an, Jimunai and Ordos plants has already been completed. The RMB 1.19 billion (USD 187.2 million) Yan’an project, controlled by Kunlun Energy Co. Ltd., started initial operations on July 10 and will begin producing LNG on Saturday, according to data from Zhuochuang Information. The facility will source gas from the Changqing Oilfield for its single LNG train.