This agreement marks Changfeng’s first step into business outside of Sanya City on Hainan island. The company will supply LNG to the manufacturer for a duration of 10 years beginning from 1 October 2018 to 30 September 2028 at a baseline price of RMB3.30/m3 (according to the agreement, an increase of LNG prices from the upstream supplier will warrant a price adjustment). The brick manufacturer is estimated to consume 1.3 million m3 of natural gas per year.
Sanya Changfeng Clean Energy has also entered into an LNG supply agreement with a rubber manufacturer in Wenchang City. The agreement outlines the supply of LNG to the manufacturer for a duration of 10 years beginning from 8 August 2018 to 7 August 2028 at a price of RMB3.20/m3 (as before, according to the agreement, an increase of LNG prices from the upstream supplier will warrant a price adjustment). The rubber manufacturer is expected to consume 500 000 m3 of LNG per year.
With the government’s policy to turn Hainan island into a free trade port and a role model to low carbon economy, Changfeng is hoping the development will increase the opportunity for natural gas consumption.
