Page 4 - AsianOil Week 05 2023

AsianOil COMMENTARY AsianOil

China’s LNG imports forecast to

rebound after falling 20% in 2022

China is expected to drive Asian LNG demand growth this year.

CHINA CHINA’S liquefied natural gas (LNG) imports incremental growth is expected to continue for
are projected to recover in 2023 to between 70 Chinese LNG imports in 2024, with Poten and
WHAT: mn and 72 mn tonnes, marking a 9% to 14% Partners telling Riviera Maritime Magazine it
China’s LNG imports are rise from 2022 analysts at Rystad Energy, Wood expects a rise to 75.7 mn tonnes.
forecast to rebound to Mackenzie and ICIS told Reuters. Several new LNG terminals are expected
at least 70 mn tonnes in In 2022, LNG imports to China fell 20% to come online in the years ahead. Wenzhou
2023 after falling by 20% year-on-year to 64.4 mn tonnes as strict Covid LNG is expected to come online in June, while
in 2022. lockdowns combined with increased use of nat- CNOOC’s Zhuhai LNG terminal is set to begin
ural gas from domestic production and pipe- operations in 2024 and Hanas’ Putian terminal is
WHY: line sources dinted the country’s appetite. LNG slated to come online in 2025.
Strict Covid lockdowns imports also took a hit from the fact that landed
have been lifted, but prices of LNG averaged $15 per million British Japan retakes top position for LNG imports
lingering effects, high thermal units (mmbtu) in the first half of 2022, in 2022
prices, and increased which was almost twice as high as the average With China’s declining imports in 2022, Japan
domestic production and landed prices over this period in 2021. regained its top global position for LNG im-
pipeline imports will limit The decrease in imports by 20% marked ports. Prior to China assuming the role of top
growth of LNG imports the largest annual decline since China began global LNG importer in 2022, Japan had held
this year. importing LNG in 2006. the top position for over 50 years.
On the other hand, domestic gas production Meanwhile within the region, Japan and
WHAT NEXT: climbed by 6% in 2022 to reach a record output South Korea are projected to see a reduction in
Another LNG terminal of 220 bcm and all signs indicate that domestic LNG demand this year. High LNG prices have
is slated to come online production will continue to account for a greater seen the two East Asian countries look to nuclear
this year in China, while portion of the energy mix in the years ahead with power for a greater share of its energy mix. High
global supply should considerable investment pouring in. gas storage and an increase in consumption of
rise marginally from the With increasing volumes of gas arriving from coal are also expected to play a significant role
restart of Freeport and pipeline sources, the country is likely to remain in reducing South Korea and Japan’s demand for
Malaysia LNG. out of the spot LNG market for most of 2023. LNG this year, ICIS’s lead Asia gas analyst Alex
In 2022, the cost of pipeline gas from Russia Siow explained to Reuters.
reached close to $7bn, nearly doubling from However, Japanese demand could still rise
$4bn in 2021, highlighting larger flows of gas. this year. Given the country’s tight power grid,
Despite overall LNG imports falling in 2022, any unexpected outages will mean that LNG will
imports of LNG from Russia saw a major uptick, be leaned on.
tripling from 2021 levels. Similarly, imports from
Qatar also increased last year. Global demand to rise minimally in 2023
ICIS forecasts that global demand this year will
Modest demand growth projected in 2023 reach 404.4. mn tonnes, while supply is expect-
While December 2022 saw the country hit its ed to be 408.2 mn, making the global market
highest monthly import level for the year of 7.5 long by 3.8 mn tonnes.
mn tonnes, industry experts believe imports Supply is expected to grow modestly in 2023
this year are not likely to top 2021’s record level with an expected resumption of Freeport LNG
of 78.9 mn tonnes, which saw it leapfrog Japan and Malaysia LNG, after both suffered lengthy
as the world’s biggest importer of LNG. outages last year.
Appetite is expected to be limited in 2023 by New production is also expected to come
high prices and a hangover from the country’s online from Tango FLNG in Congo and the Tor-
lengthy pandemic restrictions, which only saw tue FLNG project in West Africa. A third train is
an easing last December. Policy support for clean also expected to be added at Indonesia’s Tangguh
coal as well as a warmer than usual winter are LNG. However, all of the projects are relatively
also likely to limit LNG imports growth this year. small and will not significantly raise global LNG
Meanwhile, looking further ahead, supply. ™

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