• 5 minutes 'No - Deal Brexit' vs 'Operation Fear' Globalist Pushback ... Impact to World Economies and Oil
  • 8 minutes China has *Already* Lost the Trade War. Meantime, the U.S. Might Sanction China’s Largest Oil Company
  • 12 minutes Will Uncle Sam Step Up and Cut Production
  • 11 hours A legitimate Request: France Wants Progress In Ukraine Before Russia Returns To G7
  • 39 mins China has invested btw $30 - $40 Billon in Canadian Oil Sands. Trump should put 10% tariffs on all Chinese oil exported into or thru U.S. in which Chinese companies have invested .
  • 3 hours Danish Royal Palace ‘Surprised’ By Trump Canceling Trip
  • 9 hours Used Thin Film Solar Panels at 15 Cents per Watt
  • 3 hours US to Drown the World in Oil
  • 19 hours Recession Jitters Are Rising. Is There Reason To Worry?
  • 13 hours IS ANOTHER MIDDLE EAST WAR REQUIRED TO BOLSTER THE OIL PRICE
  • 5 hours Iran Is Winning Big In The Middle East
  • 3 hours With Global Warming Greenland is Prime Real Estate
  • 3 hours Tit For Tat: China Strikes Back In Trade Dispute With U.S. With New Tariffs
  • 8 hours Strait Of Hormuz As a Breakpoint: Germany Not Taking Part In U.S. Naval Mission
  • 13 mins Trump cancels Denmark visit amid spat over sale of Greenland
  • 10 hours LA Solar Power/Storage Contract
  • 8 hours Philadelphia Energy Solutions seeks to permanently shut oil refinery - sources
Alt Text

Is Big Oil's Natural Gas Bet Turning Sour?

Big Oil has been piling…

Alt Text

Japan Is Bargain Hunting As LNG Prices Slump

Utilities in Japan, the world’s…

Irina Slav

Irina Slav

Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.

More Info

Premium Content

China Prepares For A Natural Gas Import Boom

Last month, the International Energy Agency said that China will account for 40 percent of the global annual growth in natural gas demand over the next five years. Imports of the bridge fuel in Asia’s second-largest economy are running at record rates as Beijing pushes on with its cleaner energy agenda that should see the country satisfy 10 percent of its energy needs with gas in 2020, from 5.9 percent in 2015. This shift to gas is now creating new opportunities for independent energy companies at the expense of state-owned giants.

Energy independents are building a string of LNG import facilities, Bloomberg reported earlier this week, stimulated by the government’s efforts to promote gas and encourage competition, and by the attractive prices on the spot market. Having your own import and distribution infrastructure is essential for these independents, according to one Sanford C. Bernstein analyst, if they want to take full advantage of current market prices.

What the gas independents are doing is follow in the footsteps of the independent oil refiners, the teapots. In fact, some of them are teapots. There are already three LNG import terminals, developed by Jovo Energy, Guanghui Energy, and ENN Group—one of China’s biggest energy independents. Three more terminals are either being planned or are already under construction. According to ENN Group, this new capacity will boost energy consumption in China as it will bring down gas prices, and consequently, the price of electricity.

The three state energy majors own and operate 12 gas import facilities, but they buy their gas under long-term contracts. Independents are nimbler and very open to the spot market, taking full advantage of the current global LNG glut that has brought prices considerably down. Spot market costs, according to analysts, could be as much as 50 percent lower than the average costs under term contracts used by state companies. Related: Dear Millennials, Big Oil Is Not Your Enemy

The energy independents are likely to continue enjoying strong support from the government: the country’s National Development and Reform Commission said last month that China’s LNG import capacity could well reach 100 million tons by 2025, from 43.8 million tons in 2015. Independents will likely account for a solid portion of the increase.

Earlier this year, a senior PetroChina official said that gas demand in China could jump by 30 billion cubic meters this year thanks to the new government policies for the energy sector. This would constitute a 14.6-percent annual increase from last year’s 205.8 billion cu m in apparent consumption and an all-time high.

LNG demand in particular could rise by 5-6 million tons annually over the medium term, according to Energy Aspects analyst Michal Meidan. Already, in the first six months of this year LNG imports surged by 38.3 percent on an annual basis, to 15.89 million tons.

Most of the LNG China imported in the first half of the year came from the world’s top two exporters, Qatar and Australia, but this rush to expand the import capacity is definitely good news for other exporters, notably the U.S. Thanks to the abundance of gas at home, U.S. LNG can be sold at competitive prices and win its producers a foothold in the country that’s shaping up to become a top consumer of the fuel in the future.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:




Download The Free Oilprice App Today

Back to homepage


Leave a comment
  • David Fischer on August 13 2017 said:
    Meanwhile here in Canada with a Montney gas play the size of Texas and Green Nazi socialists shutting down any pipeline or LNG plant so we won't be taking part in this bounty of wealth created.

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play