The reference news network reported on October 16 that the Japanese media said that China is expected to surpass Japan, which is the long-term leader for the first time in 2018, and become the world’s largest natural gas importer.
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According to Japan’s Nikkei Asian Review website reported on October 14th, the increase in China’s natural gas imports has had an impact on the spot price of LNG in Asia: from July to December last year, Asian LNG prices doubled from 100 per 100 The British thermal unit rose to $11.20 from $5.45.
An analyst said that the sharp rise in demand from China, Asia’s largest economy, could also affect the international trade in natural gas – the latter mainly based on long-term contracts – “which could lead to global competition for natural resources”.
According to the report, from January to August this year, China imported 57.18 million tons of natural gas; by contrast, Japan imported 56.45 million tons. In 2017, China surpassed South Korea and became the world’s second largest natural gas importer.
The International Energy Agency predicted in June that China will become the world’s largest natural gas importer by 2019. But the latest data seems to speed up this timeline. The increasing diversification of sources of supply in Asian countries indicates that the region’s importance as a natural gas consumer is increasing.
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Huang Miaoru, senior manager of natural gas and liquefied natural gas in the Asia Pacific region of energy consulting firm Wood Mackenzie Consulting, said: “Although Japan is still the largest importer of LNG, China is expected to surpass Japan to become the world’s largest natural gas importer by 2018. China Natural gas imports have consistently exceeded market expectations.”
The report said that concerns about environmental pollution are the main reason for China to increase natural gas imports. Severe air pollution has prompted China to quickly switch from burning coal to using natural gas, which burns cleaner and emits about half of the carbon dioxide.
China imports natural gas in two ways, one is liquefied natural gas and the other is pipeline natural gas. For example, LNG, which can be transported by tankers, imported 38.13 million tons of LNG last year, a 46% increase from 2016. In 2011, China imported only 12 million tons of LNG, which is one-third of South Korea. In just six years, China’s LNG imports have tripled.
According to the report, if the natural gas supplied by the pipeline is included, China seems to have surpassed Japan to become the world’s largest natural gas importer this year. Japan, which imports only LNG, is still the largest importer of such commodities.
Guan Xincun, a partner at Commodity Consulting’s Market Risk Consulting Company, said: “The natural gas trade is unlikely to be immediately affected by the surge in demand, as (natural gas purchases) are usually signed long-term contracts and the storage capacity of importing countries is limited.”
However, he is cautious about the long-term impact of China’s natural gas demand and global trends.
Guan Xincun said: “If the COP24 meeting scheduled for December 2018 decides to accelerate the withdrawal of coal use, in the long run, natural gas demand may increase further, which may lead to countries competing for natural resources on a global scale.” COP24 The meeting referred to the next meeting of the parties to the Paris Climate Change Agreement.
According to reports, China is now looking for new suppliers. In mid-September, PetroChina and Qatar’s state-owned Qatar Gas Company reached a 22-year LNG agreement. The “Siberian Power” gas pipeline is the longest natural gas pipeline in the world, with a total length of 3,000 kilometers, connecting eastern Siberia and China. It is expected that the natural gas pipeline will be put into use next year to transport natural gas from the Arctic Circle to China.
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