China returned to the number-one spot among LNG importers last year, with shipments rising 12% to almost 71 million tons, Bloomberg has reported, after analyzing tanker tracking data.
The rebound in LNG shipments follows a weak 2022 when high LNG prices driven by Europe's gas crunch dampened demand and made China seek more affordable alternatives to the liquefied fuel.
China is seen remaining the biggest driver of LNG demand globally in the longer term, too. According to Rystad Energy, the country will see a 20% increase in demand for liquefied natural gas over the next two years, with the annual total hitting 84 million tons in 2025. This will soar further to 136 million tons by 2030, the consultancy also said.
Depending on whether demand growth in China grows faster than new production capacity is added, we might see price wars yet again as Europe deepens its dependence on the liquefied fuel with more floating regasification terminals.
Last year, there were worries Europe might find itself in a tight spot again with regard to gas as China went to the spot market to secure cargos for the winter, after signing several long-term supply agreements with U.S. and Qatar.
For now, this has had no effect on European gas supply mostly because of relatively mild weather but the winter is not over yet and supply might yet tighten as the EU dips into its winter gas storage.
China is also making sure to diversify its supply. It is a major client of U.S. LNG producers but it is also a big investor in Russia's Arctic LNG 2 project, which was recently added to the U.S. sanction list. This reportedly led to a rare request by the Chinese side for a sanction exemption as it sought to remain an LNG buyer from both countries.
By Irina Slav for Oilprice.com
Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More
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