China set to top Japan as world's biggest natgas importer
SINGAPORE (Reuters) — Beijing's crackdown on pollution has put China on track to overtake Japan this year as the world's biggest importer of natural gas, used to replace dirtier coal.
China—already the biggest importer of oil and coal—is the world's third biggest user of natural gas behind the United States and Russia, but has to import around 40% of its total needs as domestic production can't keep up with demand.
Data compiled from the Thomson Reuters Eikon terminal indicates China's 2017 imports of pipeline gas and LNG will top 67 MMt, up by more than a quarter from a year earlier. LNG imports alone surged more than 50%.
The data, which includes LNG tanker arrivals to China and pipeline monthly import flow estimates, is preliminary as December figures are not yet available.
China still lags Japan, with gas annual imports of around 83.5 MMt, all as LNG, but its overall gas imports topped Japan's in September and again in November, government data and shipping flows show.
Analysts say the trend is set and China should top Japan for the full year in 2018.
"Both LNG and pipeline imports will continue to increase in the next few years. We expect China to overtake Japan as the world's largest gas importer in 2018," said Miaoru Huang, Asia gas and LNG senior manager at energy consultancy Wood Mackenzie.
"But Japan will remain as the No.1 LNG importer till around 2028," she added.
China last year started to move millions of households and many industrial facilities from coal to gas as part of efforts to clean its skies, sparking an unprecedented rally in overseas import orders.
China's three biggest LNG suppliers are Australia, Qatar and Malaysia, while pipeline imports come from Central Asia and Myanmar. A pipeline connecting China to Russia is under construction.
Unlike established LNG importers which import the bulk of their cargoes under long-term contracts with fixed monthly volumes and a link to the oil market, many Chinese utilities buy LNG in the spot market when they need it at short notice, such as the current peak demand winter season.
As a result, Asian spot LNG prices have more than doubled since June to $11.20/MMBtu, their highest since November 2014, making LNG one of 2017's strongest performing commodities.
China's surging demand already pushed it past South Korea in 2017 as the world's No.2 LNG importer.
Reporting by Henning Gloystein; editing by Richard Pullin
Indonesia, home to 260 MM people on 14,000 islands across a vast archipelago, is estimated to become the seventh-largest economy in the world by 2030, with such growth expected to boost the nation’s energy consumption by 80% from present levels.<sup>1</sup>
At October’s HPI Forecast Breakfast for our sister publication, <i>Hydrocarbon Processing</i>, I shared <i>Gas Processing</i>’s forecast on change in the LNG industry.
In one of the toughest markets in the history of gas compression, we are challenged to deliver more with less.
The New LNG Imperative
The shale gas boom established the US as the world’s leading natural gas producer and is responsible for billions of dollars of investments in the US gas processing industry. Since 2012, the US has witnessed unprecedented growth in new gas processing capacity and infrastructure. This rise is due to greater production of domestic shale gas, which is providing cheap, available feedstock to fuel the domestic gas processing, LNG and petrochemical industries. New gas processing projects include the construction of billions of cubic feet per day of new cryogenic and gas processing capacity, NGL fractionators, multi-billion-dollar pipeline infrastructure projects, and the development of millions of tons per year of new LNG export terminal construction. Attend this webcast to hear from Lee Nichols, Editor/Associate Publisher, Hydrocarbon Processing, Scott Allgood, Director-Data Services, Energy Web Atlas and Peregrine Bush, Senior Cartographic Editor, Petroleum Economist as they discuss the future of LNG and the application of Energy Web Atlas, a web-based GIS platform which allows users to track real-time information for every LNG project.
November 29, 2017 10am CST
View on Demand