“In 2018, Asian liquefied natural gas (LNG) imports again exceeded expectations and absorbed increasing supply, especially in China.”
On March 13, Shell’s LNG Prospects Report 2019 (hereinafter referred to as the “Report”) showed that the global LNG imports increased by 27 million tons last year, of which China’s net LNG imports increased by 16 million tons, accounting for 59.26% of the global increase, ranking first in the world, followed by South Korea, Pakistan and India.
According to the General Administration of Customs, China imported 53.78 million tons of LNG in 2018, up 41.2% year on year.
“Over the past two years, the global LNG industry has benefited from strong growth in China’s demand market.” During the “Report” conference, Steve Hill, Shell’s global executive vice president, said in an interview with media such as Interface News.
China has become the world’s largest importer of natural gas. According to the data of China Petroleum Economic and Technological Research Institute, China’s natural gas consumption last year was 276.6 billion cubic meters, up 16.6% from the same period last year, and its natural gas import volume was 125.4 billion cubic meters, up 31.7%.
According to the report, in 2018, China’s imports of LNG accounted for 53% of the total natural gas supply, while domestic and pipeline imports accounted for 26% and 21% respectively.
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From the perspective of China’s natural gas consumption industry, industry, civil and commercial accounts for 44% and 38% respectively. Secondly, electricity and transportation accounted for 11% and 7% of the total natural gas consumption, respectively.
According to Steve Hill, the challenge facing the global LNG industry is “highly predictable supply, but highly unpredictable demand”.
“There will be more new LNG projects in the next two years and very little supply in the next three years, but demand will continue to increase.” Steve Hill said that in LNG supply, sustained global investment is needed to meet the growth of long-term demand.
Shell expects to add 35 million tons of LNG worldwide in 2019, which will be absorbed by Asia and Europe. The global demand for LNG is estimated to be about 350 million tons in 2019 and 384 million tons in 2020, with an average annual growth rate of about 9.7%.
Last year, LNG’s new capacity for final investment decisions was 21 million tons, compared with a total of only 7 million tons in 2016 and 2017.
In the future, China will still be the most competitive country in LNG market. According to the report, China’s LNG import capacity may double in five years, and interconnection will greatly increase the utilization of receiving stations.
Previously, Liu Xiaoli, a researcher at the Energy Research Institute of the National Development and Reform Commission, predicted that China’s natural gas demand would approach 300 billion cubic meters by 2020 and 600 billion cubic meters by 2030.
In terms of specific supply, Australia’s LNG exports catch up with Qatar’s long-standing leader by the end of 2018, and its exports are expected to increase by 10 million tons in 2019.
In the next three years, the United States and Russia will be the fastest growing LNG supply countries in the world, and will also be major exporters.
At present, the price of natural gas in the United States is at the lowest level in the world. US LNG export price is linked to Henry Center (HH) price.
Last year, the annual average price of HH was $3.16 per million British heat units, 60.74% lower than the annual average price of NBP in Europe of $8.05 per million British heat units and 66.41% lower than the average import price of LNG in Northeast Asia of $9.41 per million British heat units.
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China Petroleum Economic and Technological Research Institute has predicted that the LNG price of HH will be US$3 per million British heat units in 2019, the NBP price in Europe will be US$7.3 per million British heat units, and the spot CIF quotation of LNG in Northeast Asia is expected to fall, with an average price of US$8.5 per million British heat units.
“In LNG production structure, the United States is the most transparent country. If the price of a LNG project is not competitive, it is hard to say that it will succeed. Steve Hill said.
For comprehensive consideration, China and the United States have cooperated in the field of LNG.
In 2018, China imported 2.26 million tons of LNG from the United States, accounting for 4% of China’s LNG imports and 12% of U.S. LNG exports. China is one of the top three LNG export destinations in the United States.
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