Page 7 - GLNG Week 24

GLNG ASIA GLNG
LNG in the long term for China
Chinese LNG import dependency is rising, driven by exibility and infrastructure gains
PERFORMANCE
WHAT:
Chinese LNG demand accounted for half the growth in 2018.
WHY:
The Chinese government is eager to reduce
the role of coal in its economy.
WHAT NEXT:
LNG supplies bring their own security of supply concerns, as has been highlighted by the trade war with the US.
ASIA continued to dominate LNG demand in 2018, according to BP’s Statistical Review of World Energy 2019, released on June 11. e region accounted for 74.9% of LNG imports last year, or 322.8bn cubic metres (cm) of gas. is was up by 13.4% from 2017. China’s LNG demand accounted for around half of the import growth.
ere is a supply gap, though, with the region only producing 38.2% of the world’s exports, driven by Australia, which alone accounts for 21.3%. Australia is on course to become the world’s largest LNG exporter, with data from the rst half of 2019 suggesting this may be the year it overtakes Qatar.
China continued to account for much of the increased demand for LNG, with imports expanding 38.8% year on year to reach 73.5bn cm in 2018, or 17% of the world total. e coun- try only began importing LNG in 2006 but has seen dramatic growth since 2016.
e country’s overall gas demand increased by 17.7%, or 43bn cm, in 2018 to 283bn cm, BP said, second only to the US, which increased by 78bn cm to 817bn cm.
The International Energy Agency (IEA), which published its Gas 2019 report in early June, predicted China would account for more than 40% of the world’s gas demand growth until 2024. It also pegged the growth in China’s con- sumption at 18% in 2018, and said the govern- ment was pushing for a shi from coal in order to improve air quality. is rate of increase should slow to 8% during the period to 2024, it said, as economic growth slows.
e International Monetary Fund (IMF) has projected the Chinese economy will slow from 6.3% in 2019 to 5.5% in 2024.
e IEA went on to predict demand would be up 9.1% this year, with the switch from coal continuing to drive the growth. Total gas con- sumption in 2019 should reach 310bn cm, it said, with industry taking the largest share at 96bn cm, 74bn cm for residential and commercial, with 69bn cm going to power. By 2024, the IEA said, demand will be 166bn cm higher.
e country’s Blue Sky Policy is intended to see sulphur dioxide and nitrogen oxide down by 15% from 2015, with ne particu- lates in cities down by at least 18%, also from 2015 levels.
While gas is on the increase in China, there is clear competition from coal. BP’s report noted the country produced 82 million tonnes of oil equivalent of coal in the year. “India and China together [accounted] for the vast major- ity of the gains in both consumption and pro- duction” of coal, BP’s chief economist, Spencer Dale, said.
Pipeline potential
While much of China’s additional gas supply has come from LNG, there are plans for Russia to complete its Power of Siberia 1 link later this year. State-owned Russian gas giant Gazprom is due to begin test shipments through the network on December 20, in line with the 30-year supply deal it struck with China National Petroleum Corp. (CNPC) in 2014.
While the system is likely to deliver just 5-8bn
Week 24 20•June•2019 w w w . N E W S B A S E . c o m P7