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Imports of liquefied natural gas (LNG) into Northeast Asia are set to decline in June from May, for the first time on record dating back to 2013, amid slowing economies and high storage levels, Reuters reported on Tuesday, citing ship-tracking data from Refinitiv.
Typically, LNG demand in the biggest importers of the super-chilled fuel in Northeast Asia—Japan, China, South Korea, and Taiwan—increases month on month in June because of higher gas demand for air conditioning in northern hemisphere summers.
This year, however, Northeast Asian imports are set for a decline this month compared to last month, with Chinese LNG imports seen as the main drag on lower imports. China’s LNG imports are expected to fall by 9 percent in June compared to May due to the slow switch from coal to natural gas as economic growth weakens, according to Reuters estimates.
The key LNG importers in Northeast Asia are also expected to see the growth in their monthly LNG imports drop in the first half of this year for the first time since 2015, according to Refinitiv data crunched by Reuters.
While global LNG supply is expected to grow by 14 percent this year, slowing demand growth in Asia may not be enough to absorb all the supply that’s due to come online this year, James Taverner at consultancy IHS Markit told Reuters.
China breakneck demand surge of the past two years is expected to slow this year as Beijing is determined to avoid severe shortages by boosting pipeline connectivity, building more storage and import terminals, and raising domestic natural gas production.
“Economic slowdown, a more considered approach on coal-to-gas switching and increased domestic infrastructure availability will mean LNG demand will slow in 2019, from the 40-45% growth we have seen in 2017 and 2018,” energy consultancy Wood Mackenzie said in its 2019 LNG outlook in early January.
“But China will still grow at around 20%, by far the largest source of LNG demand growth in the global market,” according to WoodMac.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.