China Need More Long Term LNG Amid Expanding Terminal Capacity

LNG terminal capacity in China is expanding faster than import growth, requiring more LNG deals according to Wang Danxu at Sinopec Economics and Development Research Institute.

• An increase in LNG infrastructure building, including storage and terminals is need in China to counter global supply risks, said Wang. A certain level of terminal redundancy will eliminate threats from unexpected outages.
• More stable long-term LNG supplies will be required as spot purchases will be kept at a “reasonable level.”
• China’s ratio of spot LNG purchases is higher than other Asian buyers up to 30% of total imports but have been curbed by high prices with a tight market expected until 2026.
• Asia spot LNG prices could range between $12-$16/mmbtu through 2025 and could fall to $7-$10/mmbtu during 2026-2030.
• Russia gas flows will shift toward China amid falling piped gas to the EU. Power of Siberia 1 pipeline supplies are planned to increase from 2026, with the start of PoS2 possible in 2030.
• China's demand for natural gas is forecast to reach a plateau of 610bcm around 2040 to account for 13% of primary energy use compared with 425bcm and 9% projected for 2025.