Western Xinjiang Lng Project Economic Analysis

The author in the present paper expounds and proves the feasibility of implementing LNG Program in Xinjiang's west company in the three aspects of development situation for natural gas market, competitive structure of LNG (Liquefied Natural Gas) sector and LNG economic analysis of enterprises.Judging by the development situation of macro natural -gas market, along with China's sustainable and rapid growth in economy at the beginning of the century, a large gap exists in China's domestic energy supply, which is around 300 hundred million cubic meters.As the technique on liquefied natural gas and its transportation and storage in cold temperature becomes mature, the sector of LNG is born. The LNG production in China has just kicked off. On account of gas sources, China merely sets up LNG factories and carries out small-scale production in Pudong, Shanghai and Central Plains Oil Field.Xinjiang's West Company now enjoys advantages in both "favorable climate a Since our natural -gas market has a large demand, LNG sector, a necessary supplement of piped natural gas, will have extensive space for development, and geographical condition" in developing Xinjiang's LNG production.Judging by the competitive structure and situation of LNG sector at medium range, LNG process and transportation belongs to a profitable and risky sector with harder access and withdraw. The products are less likely to be substituted and less fierce competition is present between competitors in the sector, which shapes up the advantage for Xinjiang West Company to enter LNG process and transportation sector. In addition, the purchasers and suppliers of the products have stronger bargaining capability, which, in the meantime, poses a disadvantage for Xinjiang West Company to enter LNG processing and transporting sector. The supplier's bargaining capability is a key factor to influence the development of an enterprise.Judging by the LNG economic efficiency of an enterprise at micro range, the net financial value for LNG item investment comes up to 1,473,000,000 RMBY; the recouping period for investment accords with the demand of natural gas and the profit rate of investment is higher than 6%, an average rate for natural gas sector, with handsome economic efficiency.Hence, I believe that it is both prospective and feasible for Xinjiang West Company to prepare for implementation of LNG program.