China Sharply Increases Gas Consumption Becoming the Largest LNG Importer in the WorldDec 5th, 2017
The General Administration of Customs of China reports that in the mid-autumn 2017, the LNG imports increased by almost 96% and reached 3, 6 million tons. Still, this is not the limit. The CNPC analysts predict that next year the country will consume 50 MMt of gas, thereby beating South Korea, and become the 2nd largest LNG importer across the globe. Currently, the main exporters of LNG to China are Qatar and Australia.
The experts note that gas consumption will only grow, and in 2020 China will need 360 billion CMB of gas. Long-term forecasts estimate that within the next 20 years the gas consumption will increase to 600 billion CMB. Thus, PR China will become the first global LNG consumer. Consumption growth is caused by growing needs of the Chinese electric power sector. The gas volume in overall energy requirement will grow by 10%.
The Government is chiefly concerned over the issues of air pollution by power companies that use coal for energy production. To improve the situation, the country intends to transfer CHP stations to natural gas, which is an environmentally friendly fuel.
All electricity generation capacities in Beijing area are already switched from coal to gas. Apart from the energy sector, the government also encourages gas consumption in industrial and household sectors.
North American manufacturers, attracted by large amounts of LNG supplies and favorable price situation in Southeast Asia, consider China as the major importer of their gas. The November visit of Donald Trump to Beijing culminated in the endorsing an agreement to increase LNG supply to China. The U.S. gas companies seek long-term cooperation on LNG supplies.
A number of Chinese companies, including CIC and Sinopec, have already signed the contracts with the U.S. companies for the LNG facility construction which cost $ 43 billion. In turn, China Energy Investment plans to fund $ 84 billion in gas processing projects in the U.S. In this way, China shows the intention to participate directly in the advancement of American gas industry.