China eyes more LNG imports; winter supply crunch to worsen

30 September 2013 10:26  [Source: ICIS news]

SINGAPORE (ICIS)--China will need to import more liquefied natural gas (LNG), with the imminent worsening of a supply crunch at the onset of winter amid growing consumption, industry sources said on Monday.

Imports are expected to account for the country’s 30.5% of China’s gas consumption this year, up by 4.36 percentage points from 2012, according to C1 Energy, an ICIS service in China.

China’s 2013 gas consumption is estimated to hit 165bn cubic metres (bcm), representing a 14% growth from the previous year, while domestic supply is projected to grow at a slower pace of 9% to 114.6bcm.

However, the gap between demand and supply, including imports, would exceed 10bcm this year, with the situation expected to be worse in the northern regions, an industry expert said, citing that coal-fired boilers in China were mandated to be replaced by units that run on clean fuel, thereby increasing the country’s gas requirement.

In the Beijing-Tianjin-Hebei region, coal-fired boilers will be demolished this winter as part of the government’s effort to improve air quality.

Starting 15 November, the Chinese government is expected to restrict the industrial use of natural gas to prioritise the heating requirements of households during winter.

Domestic gas suppliers usually reduce their piped gas supply to gas liquefaction plants and users in the industrial and road transportation sectors during this time.

In September, PetroChina started to ration truck-delivered LNG supply from its Rudong terminal in Zhejiang province and may continue to do so throughout the whole winter season, an east China-based trader said.

Chinese importers are actively seeking for LNG cargoes in the overseas spot market for delivery during the winter season, an international LNG trader said.

By: Rita Huang
+65 6780 4327

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