Page 9 - AsianOil Week 30 2022

AsianOil EAST ASIA AsianOil

Chinese imports

of Russian LNG hit

2.35mn tonnes in

first half of 2022

PERFORMANCE THE first half of 2022 has seen Chinese import-
ers snap up 2.35mn tonnes of Russian LNG with
a total value of $2.16bn. In a knock-on effect,
Russia has moved up China’s supply rankings,
most notably at the cost of the US, whose export
volumes to the Asian country nosedived by 76%
over the period.
Having moved up the rankings, Russia now
stands in fourth place on China’s list of suppliers
in the year to date, behind Australia, Qatar and
Malaysia.
This comes at a cost for all other suppliers
to China, though. In similar form to the US, all
other LNG suppliers to China have seen export
totals dip, albeit not by quite so much.
Data from Chinese customs officials released
earlier in the month now show that import totals
for LNG have risen 28.7% year on year, with data also indicates that the value of all pipeline
recent price increases pushing the actual value gas shipments has climbed almost threefold y/y
up by over 180%. Much of this increase has been across the January-to-June period, reaching
brought about as a direct cause of the Russian $1.66bn.
invasion of Ukraine and spiralling costs for LNG A spokesperson for the General Adminis-
worldwide. tration of Customs (GAC) of China, Li Kuiwen,
Michal Meidan, director of the China Energy said that in order to “protect the legitimate busi-
Programme at the Oxford Institute for Energy ness rights and interests of the relevant import-
Studies (OIES), has, in part, attributed China’s ers and exporters”, the agency no longer releases
ability to expand its purchases of Russian LNG breakdown data on pipeline gas shipments.
The increases are not predicted to last forever,
Russia has moved to reduced demand for purchases from Russia though. LNG demand across China is forecast to
among other Asian buyers.
up China’s supply “The increase in Russian LNG could be a dip by around 20% by the end of the year, accord-
rankings, most displacement of cargoes going to Japan or South ing to some analysts, although consultancy
Korea because of sanctions, or weaker demand Wood Mackenzie has limited its projection of
notably at the there,” Meidan said. the potential drop in LNG imports to 14%.
US firms looking for larger profits on spot
There is no end in sight for continued high
cost of the US. cargoes was another aspect of the drop-off in prices, however.
US exports to China, according to Meidan. “US
“Because of Europe’s need to continue to
LNG has been going to Europe because higher source significant volumes of LNG, prices are
prices and demand there have made it more expected to stay elevated at levels which will
attractive to ship it there,” she added. reduce spot procurement in Asia, especially
Russian natural gas piped to China has also China,” Jeffrey Moore, analytics manager of
reached new highs of late, with state-owned Asian LNG at S&P Global Platts, has been
Gazprom repeatedly announcing new supply quoted as saying.
records by way of the Power of Siberia pipeline. In part Chinese firms are working to coun-
One statement released by the company ter the expensive LNG prices of late, with Wood
modestly announced that “currently, Gazprom Mackenzie’s Miaoru Huang noting that Chinese
carries out the gas supplies above the contractual buyers had minimised their exposure to costly
daily volumes”. spot LNG.
Sources indicate that Russian pipeline ship- “Spot purchases were muted, and reportedly
ments to China have soared by well over 60% in some Chinese players (also) resold cargoes into
the first six months of the year. Chinese customs the European market,” Huang added.™

Week 30 29•July•2022 www. NEWSBASE .com P9