Page 10 - GLNG Week 04

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China imports record amount of LNG in 2019
PERFORMANCE
CHINA’S imports of LNG climbed 12.2% year on year in 2019 to a record high of 60.25mn tonnes, despite concerns that the country’s economic slowdown would impinge on demand.
Imports for the year placed Asia’s largest economy behind Japan in terms of purchases – Japanese imports slid 6.7% y/y to 77.32mn tonnes, according to General Administrations of Customs (GAC) data published on January 23. As China’s imports of LNG have surged, pipeline gas imports inched down 0.8% on the year to 36.31mn tonnes.
Domestic production, meanwhile, climbed by 11.5% y/y to 177.7bn cubic metres, accord- ing to data from the National Development and Reform Commission (NDRC).
State-run PetroChina, the country’s largest oil and gas producer, has projected that demand will expand by 8.6% to 330 bcm in 2020. The pace of growth is slower than that seen in 2019, when demand grew by 9.4% to 306.7 bcm.
China has directed its energy majors to pro- duce more of the fuel to meet local demand, which has been stimulated by government poli- cies aimed at tackling air pollution. State-owned China National Petroleum Corp. (CNPC) said earlier this month that it would invest CNY5bn ($725mn) in exploration efforts aimed at increas- ing production to more than 200mn tonnes of oil equivalent (4mn barrels of oil equivalent per day (boepd)) in 2020, with gas output to account for half of its total output for the first time.
The government has been ramping up efforts in its “war on pollution” since 2013, launching a coal-to-gas switching programme that has seen millions of homes adopt gas-fired heating solutions. While particularly acute in Beijing, pollution levels in the city have fallen dramati- cally in recent years. The capital’s average con- centration of PM2.5 shrank to 42 micrograms per cubic metre in 2019, down 53% from 2013’s 89.5 micrograms, the city’s environment bureau has reported.™
Thailand looking at LNG spot market
POLICY
THAILAND’S Ministry of Energy has ordered state-owned oil and gas company PTT to assess the feasibility of buying LNG on the spot market in order to take advantage of lower prices.
Thai Minister of Energy Sontirat Son- tijirawong noted that spot LNG prices had declined to an average of US$4-5 per million British thermal units ($110.64-138.30 per 1,000 cubic metres), making them potentially more attractive than domestic production or imports from Myanmar.
“If PTT can import LNG at these lower prices, the ministry will reduce offshore gas production temporarily,” Sontijirawong was reported by the Bangkok Post as saying. “This plan would extend the life cycle of gas resources in the Gulf of Thailand.”
PTT already imports roughly 5mn tonnes per year (tpy) of LNG, but all these shipments are handled under long-term contracts. Son- tijirawong’s comments come as a growing number of LNG buyers are turning to the spot market, where they can currently obtain lower pricing. Meanwhile, PTT is building its sec- ond LNG receiving terminal with a capacity of 7.5mn tonnes, scheduled for start-up in 2022. A ramp-up in Thai LNG imports is thus expected, so it would not be surprising, given current trends, if the country opts to buy on the spot market.
Sontirat said the government would carefully
consider PTT’s findings, looking at them within the context of integration with the country’s gas supply.
“It will bring the possibility of a regional LNG trading hub, which the ministry plans to pro- mote in the third quarter of 2020,” he said.
PTT’s findings stand to affect existing con- tracts that it has with the Electricity Generating Authority of Thailand (EGAT), which is the larg- est gas purchaser in terms of global daily con- tracted volumes. EGAT announced in October 2019 that it intended to import its first cargoes through the spot market in November. The util- ity is also developing Thailand’s first floating storage and regasification unit (FSRU) as it seeks to step up LNG purchases.™
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w w w. N E W S B A S E . c o m Week 04 30•January•2020