Page 10 - FSUOGM Week 34 2022

FSUOGM PIPELINES & TRANSPORT FSUOGM

Chinese LNG imports slump 15.4% in July

CHINA CHINESE LNG imports slumped 15.4% year 69mn tonnes.
on year in July to 4.74mn tonnes, according to “The weakening gas demand was due to a
customs data published on August 18, as the confluence of factors, including economic slow-
country is forecast to see its biggest slump this down, rising gas import prices, policy support
year in LNG demand since it began importing for clean coal and a warmer than usual winter,”
the fuel. the Edinburgh-based consultancy said in mid-
Cumulative LNG imports in the first seven July. “Gas-fired power was a major contributor
months of this year were down 20.3% y/y, total- to the absolute decline in volumes. In addition
ling 35.93mn tonnes, according to customs data. to the factors mentioned earlier, the sector was
Meanwhile, pipeline gas imports rose by 8% y/y pressured by growth in use of renewables.”
in July to 3.96mn tonnes, and were up 10.8% y/y In contrast to the prevailing trend, China’s
in January to July, at 26.28mn tonnes. LNG imports from Russia have seen sustained
China’s own production also rose in July by growth over recent months. According to cus-
8.2% y/y, at 17.1bn cubic metres, the country’s toms data, the country imported some 400,000
National Bureau of Statistics reported on August tonnes of Russian LNG in July, up 20.1% y/y
15. Output was up 7.8% month on month. Pro- and marking the fourth consecutive month of
duction in the first seven months of the year growth. Chinese oil imports from Russia have
expanded by 5.4% y/y, arriving at 126.7 bcm. similarly been higher this year, and in July were
Chinese LNG imports soared 18.3% last year up 7% at 7.14mn tonnes (1.69mn barrels per
to a record 78.93mn tonnes, but Wood Mac- day). Beijing has been taking advantage of the
kenzie has forecast that shipments will see their discounted cost of Russian energy exports to
biggest ever decline in 2022, falling 14% y/y to expand supply from its main geopolitical ally. ™

Gazprom warns of winter

price pain for Europe

EUROPE RUSSIA’S Gazprom has warned European the start of November, in preparation for win-
consumers that they face further gas price pain ter. But injecting that extra gas will come at a
Prices could reach this winter, as its own supplies to the continent significant cost – more than $10bn at today’s
$4,000 per 1,000 remain heavily constrained and soaring sum- spot gas prices.
cubic metres this mer temperatures continue to drive up energy While the amount of gas now in storage rep-
winter according to demand and hinder hydroelectric dams. resents close to the average for this time of year
what Gazprom says In a post on its Telegram, the national gas over the past decade, Gazprom noted on Tele-
are "conservative supplier said on August 16 that European spot gram that the EU would still need to store some
estimates." gas prices could reach as high as $4,000 per 1,000 23.8bn cubic metres of gas before the start of the
cubic metres this winter, basing its statement on heating season to reach the level that it had in
what it said were “conservative” estimates. Euro- stock at the start of the 2019-2020 winter, which
pean gas prices spiked at over $2,700 per 1,000 had a cold tail-end. The bloc entered the season
cubic metres briefly during trading that day. with close to 100% storage utilisation.
Besides very low Russian gas supply, the sum- Gazprom also revealed its export numbers
mer heatwave has led to drought, hindering the for the year up until mid-August, reporting a
transport of energy commodities along rivers 36% year-on-year drop in its supplies to the
such as coal and causing output at hydroelectric so-called Far Abroad, meaning Europe plus Tur-
dams to slump. It has also led to an increase in key minus countries of the former Soviet Union.
energy demand for cooling. The company delivered only 78.5 bcm of gas to
Compounding these factors, wind power the region, or 44.6 bcm less than in the same
farms across the continent are operating at sig- period of last year.
nificantly below their typical capacity for the The company noted that exports to China
time of year, and French nuclear outages con- continued to grow – something that Russia is
tinue. Norway had to slash gas exports because counting on in the long run to offset declines in
of field maintenance. European sales – but it did not disclose figures.
EU gas storage facilities have now been Gazprom’s production dropped 13.2% in the
filled to close to three quarters of their capacity, first eight and a half months of the year, coming
meaning the bloc is only 5% away from reach- to 274.8 bcm, while demand for gas in Russia
ing its target for storage utilisation of 80% by slipped 2.3%. ™

P10 www. NEWSBASE .com Week 34 24•August•2022