China LNG Growth at Risk from Alternative Supplies

The growth in LNG demand in China is at risk from alternative fuels, according to Bloomberg, despite investment in LNG import terminals.

• China is expected to increase LNG consumption as a bridge between dirty coal and the renewable energy that will deliver net zero by 2060.
• Development of cheaper domestic production and pipeline supplies is however increasing. Russia’s proposed Power of Siberia 2 pipeline would help reduce China’s additional LNG requirements through 2030 by nearly 20%, according to BNEF.
• China looks ahead of schedule on emissions while gas doesn’t have the same level of government support as coal as a backstop to intermittent wind and solar.
• China is increasing LNG import terminal capacity although higher overseas LNG prices could weigh on delivered import volumes despite long term contract supplies, with the potential for resale.
• Rystad Energy expect China’s growth in LNG imports to continue to outpace other countries at 13% to 14% this year but won’t get back to rates of 18% seen in 2021.

Source: Bloomberg