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China's LNG imports outpaced all forecasts
2017/12/28
China's LNG imports hit yearly record in 2017 as residential and industrial demand surged in line with Beijing's policy to promote use of gas rather than coal to cut pollution particularly in winter.
China's LNG imports hit yearly record in 2017 as residential and industrial demand surged in line with Beijing's policy to promote use of gas rather than coal to cut pollution particularly in winter.
Primary estimates indicate that China became the world’s second-largest LNG importer in 2017 and overtakes South Korea as LNG shipments rose 39 percent YoY to about 38.o4 MMT, compared with 27.42 MMT in 2016 as the government’s fight against smog has focused on cutting the use of coal in favor of cleaner-burning gas.

Gas shortages deepened in December, with some cities putting quotas on residential purchases and chemical plants in southern provinces shutting in order to cope with the supply crunch, Reuters had reported, adding that constraints on infrastructure such as LNG receiving terminals and storage facilities have meant China has limited space to further increase its LNG shipments.

LNG demand increasing in 2017 was mainly due to the fundamental factors; however surging seasonal demand in the winter supports it. Current over supply conditions in the LNG market enable China’s utilities to buy spot LNG cargoes only when they require more gas during high seasonal demand in winters, however this policy could not be workable when the market rebalanced in the next decade while the spot LNG shipments would be constrained, Mosi Nabi, Senior Consultant at Global LNG Info said.
Japan and South Korea will have taken around 83.5 MMT and just over 37 MMT by the end of the year, respectively. Japan, China and South Korea together make up 60 percent of global LNG demand.

Source(s) Global LNG Info, China's GAC reports, Reuters