• 4 minutes US-backed coup in Venezuela not so smooth
  • 7 minutes Why Trump will win the wall fight
  • 11 minutes Oil imports by countries
  • 13 minutes Maduro Asks OPEC For Help Against U.S. Sanctions
  • 5 hours Climate Change: A Summer of Storms and Smog Is Coming
  • 4 hours Itt looks like natural gas may be at its lowest price ever.
  • 6 hours Venezuela: Nicolas Maduro closes border with Brazil
  • 9 hours Teens For Climate: Swedish Student Leader Wins EU Pledge To Spend Billions On Climate
  • 5 hours Tension On The Edge: Pakistan Urges U.N. To Intervene Over Kashmir Tension With India
  • 4 hours Saudi A to Splash $100 Bln on India
  • 7 hours Amazon’s Exit Could Scare Off Tech Companies From New York
  • 21 hours students walk out of school in protest of climate change
  • 1 day North Korea's Kim To Travel To Vietnam By Train, Summit At Government Guesthouse
  • 1 day Some Good News on Climate Change Maybe
  • 1 day America’s Shale Boom Keeps Rolling Even as Wildcatters Save Cash
  • 20 hours Mineral rights owners,

China Becomes World’s Second-Largest LNG Importer

LNG

China has this year become the world’s second-largest LNG importer after Japan, analysis of shipping data from Reuters Eikon has revealed. Asia’s number-one economy imported around 38 million tons of liquefied natural gas this year, an over 50-percent annual increase. To compare, Japan’s LNG imports this year stood at 83.5 million tons, while South Korea’s were about 37 million tons.

According to Reuters, this development will give a major spur to Asia’s spot market because Chinese LNG buyers are much more in favor of short-term contracts than long-term deals, unlike buyers in Japan and South Korea. In fact, China’s emergence as a large LNG buyer is changing the market in more than one way.

The emergence of a spot market is one of these ways, which undermines the established tradition of long-term contracts for LNG supplies with prices linked to oil benchmarks. The benefits of long-term supply contracts are reduced price volatility and security of supply – both Japan and South Korea are entirely dependent on imports to satisfy their demand for gas.

China coming onto the LNG scene as the government makes an effort to reduce coal consumption in line with environmental goals, has disrupted the structure of the market and has also caused a price spike that LNG exporters have been only too happy to witness and take advantage of while it lasts.

The reason it may not last is that a lot of new LNG export capacity is coming online and it seems that it will exceed demand growth, with various analysts and authorities predicting an LNG glut, including the International Energy Agency, which in October said it expected the global LNG market to remain oversupplied until the mid-2020s. However, the IEA noted in its forecast that Chinese demand could tighten the market earlier than that.

The three largest LNG importers in the world together consume 60 percent of global LNG supply. The top three exporters—Qatar, Australia, and Malaysia—satisfy 60 percent of global demand.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment
  • David Tiger Sun. on December 26 2017 said:
    Oil are drying up in old well, and shells are opening new well,. U,S, present America are trying to open new well in Attic. Are the oil drying up as consumption are increasing. Please take note. Oil will be shortage in months to come. TQ , David.

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News