Recently, JUSDA Energy Technology (Shanghai) Co., Ltd. (hereinafter referred to as JUSDA Energy) signed the memorandum of understanding (MOU) with a Japanese gas company, and announced to jointly set up the service cooperation arrangement for LNG tank-type container (or tank), link upstream Japanese liquid sources through the form of sea-land combined transportation, and directly transport LNG with an annual target transportation volume of 200000 tons at least from Japan to domestic end users. The  operation scale is expected to exceed 600 tankers.

 

 

China had emerged as the world’s largest global natural gas importer by 2018.

 

China's net annual import growth rate of LNG was also the highest in the world accounting for 59.26% of global imports. The traditional mode of transportation no more meet the supply and demand of natural currently while the LNG tank transportation, on the other hand, has a high flexibility which  other modes of transport lack. It is suitable for both storage and intermodal transportation, and has a short construction period. LNG tank transportation also has the support of the National Development and Reform Commission and the National Energy Administration

 

With the support of market, policy, shareholders and other factors, JUSDA Energy was established in November 2018, powerfully breaking into the field of global LNG tank container logistics, and JUSDA trended to perfect their layout of Industrial LNG supply chain. JUSDA Energy, depending on strong resources and technical reserves, has connected trade and transportation channels for international ocean shipping and domestic transshipment for LNG together, building a new LNG logistics mode with extremely high commercial protection level.

 

In October, 2018, the LNG tanker of JUSDA Energy from Canada successfully arrived at Shanghai Port by sea, symbolizing official commencement of LNG tanker logistics service of JUSDA Energy, and the event also connected the maritime logistics channel for import of LNG from regions in Canada to China and provided a completely new import logistics solution for China's natural gas supply. Up till now, JUSDA Energy has successfully explored marine virtual channel for import of LNG from Canada, Australia and Europe through combined sea-land transportation to China, and JUSDA Energy was allowed to skip the link like LNG receiving station to provide imported LNG pipelines with high cost performance on the whole. JUSDA Energy rapidly expanded the business and plans to add another 1000 LNG tank containers in the future to meet the requirements for service development.

 

 

The exercise of MOU between JUSDA and the Japanese Gas Company reflects that the operation capacity of JUSDA Energy is further recognized by overseas industries, accumulating experience for business expansion and further promoting the diversified development of LNG import sources and routes of Offshore LNG Connection.

 

Viewed from the perspective of economy, on the one hand, overseas gas suppliers and domestic terminal buyers are allowed to directly negotiate through maritime logistics channels of "Offshore LNG Connection ", and the gas source of overseas small and medium-sized enterprises incapable of exporting previously are allowed to access to domestic consumption terminal users with the help of independent logistics services of third parties. Domestic LNG import channels are diversified, and the margin of potential market of the business model is certainly significant based on the win-win situation of gas source suppliers and domestic terminal trade. Recently, the spot price of LNG remained sluggish, greatly intensifying the feasibility of importing LNG from Japan. Exactly relying on fast, convenient and safe characteristics of tank logistics, JUSDA Energy could successfully develop Japan as an import channel and provide competitive gas supply for domestic end users. And the sale prices of overseas small and medium-sized gas sources will be more competitive than those of large-scale gas sources to enter highly demanded market like China. As a consequence of the link of the receiving station of LNG is skipped, and distribution level is reduced, hence the overall price (source gas price + logistics cost for tank container) is more cost-effective.

 

By virtue of abundant offshore and onshore logistics channels, JUSDA Energy has explored diversified overseas gas sources presently and is capable of quickly matching the route with optimal cost optimization to enable the end customers to consume low-cost gas sources. And the import of tank container logistics will become an increasingly important source of supplementary import of LNG.

 

It is worth noting that the "Offshore LNG Connection" service mode of JUSDA Energy remains the leading one in China. While the mode is rarely and impossibly duplicated in a short duration due to high barrier of resources and technologies, so the outbreak space is expectable. It is disclosed that JUSDA Energy generates a monthly import tank operation scale of 100 tanks currently, and the business volume will further increase with the connection of more overseas import channels in the future. JUSDA Energy also actively expanded similar business in Southeast Asian countries involving Indonesia, and the company is expected to gradually increase the scope of coverage to major LNG import regions in China, developing into globally integrated maritime LNG import logistics channels in the future.

 

 

 

Normally, there are two ways for overseas gas to enter domestic market, namely the pipeline and ship. As the upgrading of the ship, the "Offshore LNG Connection" service of JUSDA Energy is capable of directly importing LNG via tank container, which is featured with higher flexibility and market liquidity, and it is in conformity with the geographical conditions of countries with various islands along the "Belt and Road Initiative" like Japan and Indonesia.

 

JUSDA Energy was invested and joinly established by JUSDA Supply Chain International Management Co., Ltd., IDG Energy Investment and Energy Management Team of JUSDA, in which respectively hold 51%, 39% and 10% equity interests. JUSDA, the first majority shareholder, the only authorized supply chain management platform service company of Foxconn Technology Group, is equipped with huge container transportation network and powerful premium capacity in the industry, and it will provide robust support for JUSDA Energy to improve LNG logistics services and reduce related costs. JUSDA Energy is mainly engaged in LNG tanks container supply chain solutions without the need of passing the LNG receiving stations which require huge capital expenditures. LNG tank container service is capable of supporting combined sea-water-land transportation by full utilizing existing port facilities to import LNG, and can also function as temporary storage units. LNG tanks flexibly respond to the changes in market supply and demand, being a vital supplementary supply source for the natural gas market.

 

 

IDG Energy Investment Limited (hereinafter referred to as IDG Energy) is mainly engaged in the investment and management of global energy assets. The company is currently focusing on continuous deepening of the energy system reform in China, increasing demand for natural gas, and the investment opportunities arising from the emerging North America Liquefied Natural Gas (“LNG”) export market due to abundant low-cost shale gas supply.