China’s liquefied natural gas (LNG) imports could reach record levels in 2024. China is the world’s largest LNG buyer, while PetroChina is the country’s largest natural gas importer.
According to Zhang Yaoyu, global head of LNG and new energies for PetroChina International, his company is anticipated to ship between 78-80 million metric tons of LNG this year. The industrial and commercial sectors are driving the demand growth, he said.
Zhang’s forecast would represent a 9-12 percent increase from the 71.2 million metric tons of LNG imported in 2023, as per China’s customs data. The previous record was 78.8 million metric tons imported in 2021.
“Based on the first quarter data, that’s achievable,” said Zhang. He noted that China has already shipped nearly 20 million tons of LNG in the first quarter of 2023, with the chemicals, paper, steel, and cement industries driving the demand growth.
However, for power plants in China, LNG prices would need to drop below $6 per million British thermal units (mmBtu) for consumption to pick up, Zhang added. Asia spot LNG prices had traded as low as around $8/mmBtu in February 2023, the lowest in nearly three years, but have since risen to $10.50/mmBtu due to weaker demand in Asia and Europe, as well as supply concerns.
Read more: China’s marine fuel oil exports plunge 32 percent YoY to 1.32 million tons in March
Hydropower surge reducing coal demand
Zhang expects coal to continue supporting grid stability in China and does not anticipate greater LNG adoption in power generation amid the rising use of renewable energy. “You can’t solely rely on renewable power. The reliability, that’s not going to be easy. But having said that, the base is still coal. So (in the) short term, no worries,” he said.
Additionally, a coal industry association in China reported that a sharp increase in hydropower generation in the last third of April is likely to continue, leading to lower-than-expected demand for coal in power plants. The continued ramp-up in renewable capacity is also expected to reduce coal’s share of power generation.
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