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China forecast to carry Asian LNG

demand throughout 2023

CHINA WITH China slowly emerging from almost continued, referring to ongoing virus outbreaks
three years of near isolation, hopes are high that have affected much of the country after it
This follows the slowest that increased demand across industry and the officially opened up on January 8.
growth in LNG demand power sectors will help boost LNG sales to the “It will be a gradual process and may take a
in China on record in flagging Asian market. few months to restore,” she added.
2022. Both Japan and South Korea as Asia’s other Reports do suggest, however, that Asia will
two LNG powerhouses in recent years have still account for just over 60% of global LNG
recently made significant efforts to reduce demand in 2023, with China reclaiming its
dependency on gas; Japan’s ruling Liberal Demo- spot as leading importer, a title the world’s sec-
cratic Party (LDP) government has most notably ond-largest economy previously held in 2021,
pushed to restart nuclear power plants (NPPs) before being usurped by Japan in 2022.
around the country despite memories of the In statements released by Alex Siow at ICIS,
2011 Fukushima disaster still fresh in the minds the organisation’s senior gas analyst, whilst
of many. South Korea too is looking to increase nuclear and even an increase in coal use across
nuclear capacity. north-east Asia will cut LNG imports, the supply
Import orders posted by Beijing come chain in Tokyo is still in need of further attention.
December, though, are not yet forecast to reach “Its tight power grid will mean that LNG will
the record highs set in 2021, even if demand need to come in stronger if there are any unex-
across the country is predicted by some to pected outages,” Siow said.
increase by as much as 14%. One factor that will also come to bear later in
Higher prices and the protracted after-effects the year will be the top three Asian LNG import-
of COVID will take time to overcome, according ers using considerably less LNG than they have
to analysts both inside and outside China. committed to purchasing, with resulting spot
Yet while industry will be driving LNG cargoes amounting to around 18mn tonnes dur-
demand across the country throughout 2023, ing the next 12 months.
the nation’s power sector could remain some- This is a figure equivalent to 4% of cur-
what reluctant to make any sizeable purchases rent global LNG supplies, although supply is
until costs come down further, according to sen- expected to increase slightly, with several small-
ior analyst Wei Xiong at Rystad Energy in Oslo, scale projects in West and Central Africa as well
Norway. as Indonesia expected to start commercial oper-
As a result, predictions by LNG and Asia ations in the coming months.
watchers at Independent Chemical & Energy Probable resumption of operations in the US
Market Intelligence (ICIS), Rystad Energy as at Freeport and in Malaysia will also add to sup-
well as Wood Mackenzie say this will result in ply chains, although not to any great degree.
between 70mn and 72mn tonnes of LNG wind- Prices, meanwhile, will only see a slight
ing its way to ports on China’s east coast by the change, with Rystad Energy saying the cost of
end of the year. Asian LNG could drop by $2, to around $32 per
“Growth momentum across sectors may million British thermal units. A slightly larger
only be restored after the high infections subside drop of $3 for the Dutch benchmark gas price
and when employees are back to work,” Xiong would see numbers down to $38 per mmBtu.™

P6 www. NEWSBASE .com Week 02 13•January•2023