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Report: China to become top LNG importer in 2022
CHINA
CHINA could overtake Japan as the world’s largest importer of lique ed natural gas (LNG) within three years, energy consultancy Wood Mackenzie has predicted.
e consultancy said China’s import volumes could climb by 37.5% on 2018 levels to 74.1mn tonnes in 2022, while Japanese shipments could shrink by 12% to 72.8mn tonnes.
Japan’s LNG imports edged down 0.8% year on year in 2018 to 82.8mn tonnes, which was the lowest annual gure since 2011. China, on the other hand, boosted its imports by 38% to 53.7mn tonnes.
“While LNG demand is declining, Japanese imports will remain above 70mn tonnes per year [(tpy) throughout] much of the 2020s. It will remain the second largest LNG consumer in the world until at least 2040, with demand still exceeding 60mn tpy. As such, Japan still provides ample opportunities for LNG sellers, particularly as existing contracts expire,” said senior Wood Mackenzie analyst Lucy Cullen.
e consultancy added that Japanese buyers would continue to lead contract innovation, and pointed to developments such as hybrid deals, coal indexation, joint procurement and car- bon-neutral cargoes.
Royal Dutch Shell agreed to deliver car- bon-neutral cargoes to Tokyo Gas and GS Energy in June, with the deals being the rst of their kind. Tokyo Gas and Shell announced a 10-year supply deal in April that partly used a
coal-linked pricing formula.
Cullen said: “ e decline in Japanese imports
will be driven by competition from coal, nuclear and renewables in the power sector and slow macroeconomic growth.”
The consultancy’s forecast comes as state- owned China National Offshore Oil Corp. (CNOOC) and Abu Dhabi National Oil Co. (ADNOC) unveiled a new strategic agreement to explore potential LNG sales and purchase opportunities.
e two sides have also agreed to share their LNG market knowledge and expertise as well as evaluate potential partnerships and joint-invest- ment opportunities across the entire LNG value chain.
“The future collaboration opportunities agreed today with CNOOC reinforce ADNOC’s strategic approach to partners that o er technol- ogy, capital or market access to maximise value from Abu Dhabi’s vast oil and gas resources,” UAE Minister of State and ADNOC CEO Sul- tan Ahmad Al Jaber said on July 22. Qatar is the world’s second largest exporter of LNG by capac- ity, trailing only Australia.
e two sides have also agreed to share work together in the area of ultra-sour gas develop- ment, while CNOOC units China O shore Oil Engineering Co. (COOEC) and China Oil eld Services Ltd (COSL) will also be considered for future contract work at ADNOC’s o shore pro- jects in Abu Dhabi.™
The decline in
Japanese imports
will be driven by
competition from
coal, nuclear
and renewables
in the power
sector and slow
macroeconomic
growth.
Lucy Cullen
Senior Analyst Wood Mackenzie
P8
w w w . N E W S B A S E . c o m Week 30 30•July•2019