Energy
0

China to Become World’s Top Natural Gas Importer

China to Become World’s Top Natural Gas ImporterChina to Become World’s Top Natural Gas Importer

China is expected to become the world's biggest importer of natural gas for the first time in 2018, overtaking longtime leaders Japan and South Korea.

The increase in China's imports impacts the spot price for liquefied natural gas in Asia, which doubled between July and December of last year to $11.20 per million British thermal units from $5.45, Nikkei Asia reported.

The sharp rise in demand from Asia's biggest economy may also influence international trade in natural gas, which is mostly based on long-term contracts, "potentially resulting in a global scramble for natural resources," one analyst says.

China imported 57.18 million tons of gas from January to August, compared with Japan's 56.45 million tons. China overtook South Korea as the No. 2 importer last year.

The International Energy Agency had forecast in June that China would become the largest importer of natural gas in 2019, but the most recent data appears to accelerate that timetable. Asian countries are diversifying their supply sources, a sign of the region's growing importance as a consumer of natural gas.

"Although Japan is still the largest LNG importer, China is expected to overtake Japan as the world's largest gas importer in 2018," said Miaoru Huang, Asia gas and LNG senior manager at energy consultancy Wood Mackenzie. "The amount of natural gas imports has been continually beating market expectations."

Concern for the environment is a major reason for China's increasing imports of gas. Severe air pollution has driven the country to shift rapidly from coal to gas, which burns more cleanly and emits around half as much carbon dioxide as coal.

China imports gas in two ways, as LNG and through pipelines. In terms of LNG, which can be transported by tanker, China imported 38.13 million tons last year, up 46% from 2016. In 2011, its LNG imports totaled just 12 million tons, one-third those of South Korea. China's LNG imports have tripled in just six years.

Add new comment

Read our comment policy before posting your viewpoints

Financialtribune.com