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)
Visit us at mayerbrown.com
Mayer Brown is a global legal services provider comprising legal practices that are separate entities (the "Mayer Brown Practices"). The Mayer Brown Practices are: Mayer Brown LLP and Mayer Brown Europe – Brussels LLP, both limited liability partnerships established in Illinois USA; Mayer Brown International LLP, a limited liability partnership incorporated in England and Wales (authorized and regulated by the Solicitors Regulation Authority and registered in England and Wales number OC 303359); Mayer Brown, a SELAS established in France; Mayer Brown JSM, a Hong Kong partnership and its associated entities in Asia; and Tauil & Chequer Advogados, a Brazilian law partnership with which Mayer Brown is associated. "Mayer Brown" and the Mayer Brown logo are the trademarks of the Mayer Brown Practices in their respective jurisdictions.
© Copyright 2020. The Mayer Brown Practices. All rights reserved.
This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.