Zhejiang Jinzhou wins CNOOC Ltd pipeline supply contract
Thursday, Apr 27, 2017
Zhejiang Jinzhou Pipeline Technology has secured a 278 million yuan (US$40.4 million) contract to provide steel pipes for CNOOC Ltd’s Dongfang 13-2 high-pressure high-temperature (HPHT) gas field.

Under the contract, Zhejiang Jinzhou must deliver 48,000 tonnes of pipe by August 31, with 3,153 tonnes, 12,000 tonnes and 13,000 tonnes expected by May 31, June 30 and July 31 respectively.

CNOOC Ltd will pay for Zhejiang Jinzhou’s services in three tranches, offset by a security guarantee paid by the contractor to compensate the NOC in the case of unsatisfactory service or default.

Huizhou City-based Zhejiang Jinzhou built its pedigree with NOCs after supplying PetroChina’s long-distance export routes to Kazakhstan, Turkmenistan and Myanmar, according to the firm’s website.

During the first half of 2016, Zhejiang Jinzhou recorded a 52.54 million yuan (US$7.6 million) net profit, down 3.54% from the same period of 2015. Chinese pipeline suppliers have struggled to maintain their profits as midstream operators became exposed by rapid infrastructure expansions amidst slowing economic growth.

CNOOC Ltd drilled the Dongfang 13-2 appraisal probe in 2012, encountering a 35-metre gas pay at water depths of 65 metres. Flow tests averaged 42.4 mmcf (1.2 mcm) per day. Dongfang 13-2 is situated in an HPHT reservoir north of the central sag of the South China Sea in the offshore Yinggehai Basin.

As of 2015, the field development plan (FDP) for Dongfang 13-2 featured 248.8 km of subsea pipeline, a new wellhead platform and a new central processing platform. The infrastructure was designed to connect with China National Petroleum Corp.’s (CNPC) gas terminal at Zhuhai in Guangdong, which was launched in May 2014 and pumped around 1,000 tonnes per day of LPG as of June 2014, according to ICIS data.

Dongfang 13-2 lies in the same basin as CNOOC Ltd’s Dongfang 1-1 gas field, launched in September 2003 and initially slated to deliver 12 producer wells capable of yielding 154.4 mmcf (4.372 mcm) per day. The bulk of Dongfang 1-1’s production was intended for fertilisers, power plants and residents in Hainan Province.

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