China Snaps up Emergency Arctic LNG Cargo

China has recently imported a cargo of liquefied natural gas (LNG) from Russia via the so-called Northern Sea Route as an emergency shipment of gas amid the energy shortage in China that is already hitting industry and global supply chains.

An ice-breaker LNG carrier, Vladimir Voronin, has recently delivered 70,000 tons of LNG from the Yamal LNG plant of Russian producer Novatek to the Chinese port of Shenzhen, Norway-based outlet High North News reported on Wednesday, quoting Chinese media.

Shenzhen Natural Gas Company received the LNG shipment from Russia, which sources described in Chinese media as an emergency supply for the winter heating season.

Asia's LNG prices for December delivery fell last week by 10 percent to average $31 per metric million British thermal units (mmBtu), industry sources told Reuters. The price is still high compared to prices seen at the start of the previous winter season.

LNG demand from China appears to have slightly dropped last week as the world's second-largest economy uses more coal for power generation and is increasing refinery output, a trader based in Singapore told Reuters on Friday.

Nevertheless, China continues to grapple with energy shortages, including in diesel supply.

On Sunday, the Chinese National Food and Strategic Reserve Administration said that China had released gasoline and diesel from its fuel reserve to arrest a price climb that has increased volatility in some parts of the country.

"Diesel and gasoline rotated out of the reserves will be used to increase market resources and reduce supply shortages, in order to stabilize supply and prices," Bloomberg quoted the administration as saying.

China has moved in recent days to squash the surge in coal prices with government intervention, which resulted in a plunge in the price of coal last week.

Surging coal prices and power shortages in China slowed the growth of its economy in the third quarter and are now threatening to spill over to the global supply chains in the fourth quarter.

By Charles Kennedy for Oilprice.com

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