Chengda Company Liquefied Natural Gas (lng) Strategic Choice

With China’s rapid economic development, the growing energy demand as well as the improved environmental protection requirements by low-carbon economy, natural gas as a clean energy becomes more and more popular. The introduction of liquefied natural gas (LNG) will optimize China’s energy structure and effectively solve the dual problems of energy supply security and ecological environmental protection, and play an extremely important role in realizing economic and social sustainable development.China Chengda Engineering Company Limited (abbreviated as Chengda hereinafter) is the first engineering company involved in LNG terminal, participated in the front-end planning and design work of several LNG projects in China as well as EPC contracting of LNG receiving terminal. Chengda’s performance and reference in domestic LNG industry are counted as one of the best. However, due to the high technical requirements of LNG terminal project, and the long period of project construction, faced with the increasingly intense competition between overseas engineering companies and domestic engineering companies in the domestic LNG industry, how to grasp market trends, and what strategies to be adopted by Chengda, become major issues on urgent need for Chengda to think about.This study applies the basic theory and strategic management tool to integrate the theories of industrial structure and resources capacity, then analyzes China’s LNG industry development status and development trends, as well as the strategic environment of LNG industry in which Chengda exists and the internal resources and capabilities environment. And it evaluates the opportunities and threats from external environment, internal resources and capabilities with the strengths and weaknesses. And finally, based on the full advantage of business opportunities and advantages, by avoiding the threats and weaknesses, in order to select and work out Chengda’s LNG strategy, this paper analyzes and makes a study of the strategy implementation and risk prevention.This paper is divided into seven chapters, the first chapter introduces the research background and objects to study, the purpose and significance, research contents and methods; the second chapter describes the theoretical basis of this strategic research; the third chapter of this strategic research analyzes the specific market status and development trend; the fourth chapter analyzes Chengda’s external LNG strategic environment; the fifty chapter analyzes Chengda’s LNG strategic internal factors; the sixth chapter discusses Chengda’s choice and establishment of LNG strategic programs, the seventh chapter is about the implementation of corporate LNG strategy and risk prevention.This study reaches the following main conclusions:1. The next 10 years, will still be the construction upsurge of LNG projects. Chengda’s investment into the construction of LNG projects will become a profitable business with stable growth.2. Chengda generally should adopt growth-oriented strategy, combined with the use of research and development strategy, corporate strategy and business strategy in LNG industry.3. Chengda should take advantage of human resources, brand and technology strengths to compete actively in LNG projects, and establish a relatively stable organization or group to implement specific strategies for LNG.4. Chengda should strengthen research, development and investment in LNG projects to master core technologies and achieve competitiveness in the core technologies.The main contribution of this paper is to study LNG project by analyzing the short-term and long-term development trends and the LNG strategic environment in which Chengda exists as well as the internal resources and capability advantages, to propose and work out an overall strategy choice and strategic objectives in the LNG field for the reference of company’s top management, and providing policy recommendations for the company’s top management in the scale of manpower and technology inputs as well as business strategies in LNG projects.The author hope that this thesis research not only plays an important role in Chengda’s development in LNG industry, but also can be used for reference and has reference value in China’s development in LNG industry.