Saturday, September 23, 2023
HomeGasLNG suppliers pin hopes on China for long-term demand

Subscribe

To our FREE newsletter
Get all the latest maritime news delivered straight to your inbox.

LNG suppliers pin hopes on China for long-term demand

Suppliers of liquefied natural gas (LNG) are betting on China to drive demand for the super-chilled fuel over the longer term despite last year’s slowdown, as the country locks in multi-year supply deals.

China’s LNG imports hit nearly 79 million metric tons in 2021, putting it ahead of Japan as the world’s top importer that year, but stringent COVID measures curbed spot demand in 2022, when shipments slipped to 63 million tonnes.

“We see China as a long, strong growth market,” said Andrew Barry, vice president for global LNG marketing at U.S. major ExxonMobil XOM.N, adding that China will have more than 200 million tons of LNG import capacity by 2030.

However, an economic slowdown continues to curb China’s spot LNG appetite. The country imported 39 million tonnes of LNG in the first seven months of 2023.

“What happens in the near term, with demand reduced … we’re going to have to wait and see how that response plays out. We are cautiously optimistic that demand is going to come back. The infrastructure is there, demand will come,” Barry said in an interview on the sidelines of the Gastech conference.

Exxon, he said, is looking at potential downstream LNG opportunities in the country.

As its economy grows and with peak emissions and net zero goals of 2030 and 2060, respectively, China is likely to reach its commitment to source 15% of its primary energy from gas, said Anatol Feygin, chief commercial officer at Houston-based Cheniere Energy.

Gas accounted for 9% of China’s energy mix in 2021, and the country has targeted raising that to 15% in 2030.

“We are very confident that China will be a 100-million-ton market, we think it’s likely that it gets to about 130 million tons early next decade. We think that LNG has a very robust and elegant role to play in China’s primary gas needs,” Feygin said.

LONG-TERM PLAY

Chinese importers have signed a slew of long-term deals from suppliers including Qatar and the United States in recent months, which Exxon’s Barry said gives a “huge amount of confidence.”

State-owned Sinopec and China National Petroleum Corporation (CNPC) have each signed record 27-year contracts with QatarEnergy to take on 4 million tons per annum (mtpa) of LNG.

In July, China’s Zhejiang Energy signed a 20-year supply deal with Mexico Pacific Ltd, while China Gas Holdings agreed in February to two 20-year LNG supply contracts for 2 million tons of supply with U.S. exporter Venture Global LNG.

China’s ENN Natural gas also secured a two-decade deal with Cheniere for 1.8 million tons annually.

“In the last 10 years or so, the majority of China’s LNG demand has already been covered by long-term contracts, but post-2030, the uncontracted amount will start to increase,” said Miaoru Huang, research director for Asia Pacific Gas & LNG, Wood Mackenzie.

“So there’s still potential that Chinese buyers will have appetite for new LNG contracts,” said Huang, who forecasts that China’s LNG demand could reach between 120 and 130 mtpa by 2040.

Rystad Energy forecasts that by 2030, there will be a 32-million-ton gap between China’s current contract LNG volume and future demand, widening to 80 millions tons by 2040.

In the near term, China’s LNG demand should grow by 5 million tons this year, and by 6 million to 7 million tons year-on-year in 2024, said Min Na, head of Asia LNG at Energy Aspects.

Source: Reuters

Related Posts

Video

Finance & Economy
Shipping News
Ports

Trafigura announces executive leadership changes

Trafigura Group Pte Ltd. has announced an evolution of its executive team to further strengthen leadership and focus across its global activities during a...

Woori, HMM, KOBC to buy Polaris in prospective $448 mln deal – report

Polaris Shipping Co. is poised to sell its entire stake at around 600 billion won ($447.5 million) to Woori Private Equity Asset Management Co....

Pyxis Tankers Announces Closing of Ultramax JV Investment

Pyxis Tankers, an international shipping company, reported that on September 14, 2023, the Company closed on its previously announced newly formed drybulk joint venture...

Korea’s STX denies rumor that it is backed by Chinese fund

South Korean general trading company STX Corp. has said its largest shareholder is a local investment firm, while refuting the false reports appearing through...

Navios Holdings Announces Receipt of Buyout Offer

Navios Holdings announced that its board of directors received an unsolicited non-binding proposal from N Shipmanagement Acquisition Corp. (“NSC”) to acquire all of the...

Baltic index snaps 11-session rally as rates for larger vessels ease

The Baltic Exchange’s main sea freight index, tracking rates for ships carrying dry bulk...

Baltic index rises for 11th straight session on strong vessel rates

The Baltic Exchange’s main sea freight index, which tracks rates for ships carrying dry...

The elite of the Shipping Industry meets at the “Maritime Cyprus 2023” Conference

The main theme of this year’s Conference is “Shipping in Action: An agenda for...

Maritime industry explores nuclear power for ships as technology opens up

The maritime industry is exploring whether nuclear fuel can be used to power commercial...

Baltic index logs best day in almost two months on capesize demand

The Baltic Exchange’s main sea freight index, which tracks rates for ships carrying dry...

Vopak: Agreement with Infracapital on sale of Rotterdam chemical terminals

Vopak announces that it has reached an agreement with Infracapital on the sale of its three chemical terminals in Rotterdam (Botlek, TTR and Chemiehaven)...

Port Hedland Iron Ore Exports Edge Up 4% in August

Pilbara Ports Authority has delivered a total monthly throughput of 62.8 million tonnes (Mt) for August 2023, consistent with the August 2022 throughput. The Port...

Thessaloniki, Gdańsk ports to explore synergies

Thessaloniki Port Authority S.A is expanding its role as a port of international importance through a new cooperation with the Port of Gdańsk Authority...

Hapag-Lloyd CEO: Counteroffer for HHLA would not be in our interest

Hapag-Lloyd CEO Rolf Habben Jansen said on Thursday that it would not be in the container shipper’s interest to make an offer for HHLA...

MSC offers to buy stake in Hamburg port operator

MSC, the world’s biggest container shipping company, is offering to buy almost half of the main operator of Hamburg port, in a deal that...