An LNG ship from Qatar unloads fuel at Yangkou port of Nantong, East China's Jiangsu province. (Photo by Xu Congjun/For China Daily)
China, already the third-largest LNG buyer worldwide after South Korea and Japan, is about to become an even bigger player in the market as the country's demand for natural gas continues rising sharply.
S&P Global Platts Analytics forecasts that China－which is increasingly replacing coal with cleaner burning gas to reduce air pollution－will rival South Korea to become the world's second-largest LNG importer by the end of this year, and that it will far surpass South Korea in 2018.
China's LNG imports are forecast at nearly 50 million metric tons next year, whereas South Korean LNG demand will remain at less than 40 million tons, according to Marc Howson, director of the LNG market of S&P Global Platts.
The country imported more than 25 million tons of LNG in 2016.
From January to November this year, China imported 15.2 million tons of LNG from Australia, 6.5 million tons from Qatar, 3.6 million tons from Malaysia, 2.5 million tons from Indonesia and 1.7 million tons from Papua New Guinea, S&P Global Platts said.
China has also stepped up efforts in recent years to import more LNG from Russia, Central Asian nations, the Arctic region and the United States.
China National Petroleum Corp, the country's largest oil and gas producer by annual output, has been increasing its presence in the Arctic region's natural gas sector by participating in the Yamal LNG project with Novatek, Russia's independent natural gas producer, which will ensure that China gets more than four million tons of LNG each year when the project is in full operation.
China will also import up to 38 billion cubic meters (27.3 million tons) of gas from Russia to China each year through its China-Russia East-Route Natural Gas Pipeline by the end of 2020, when the pipeline is completed.
The China-Central Asia natural gas pipeline built by CNPC, which runs through China, Turkmenistan, Kazakhstan and Uzbekistan, has transported a total of 200 billion cu m of natural gas from 2009 through the end of November－equivalent to the total consumption of the country in 2016 or 11 years of natural gas supply for Beijing.
Li Li, energy research director at consulting company ICIS China, said China will also likely continue purchasing LNG from the United States, as the latter is willing to increase LNG exports.
China is already an importer of U.S.-sourced LNG, having received 212,000 tons in 2016 and 910,000 tons so far in 2017 through a combination of spot deals and long-term contracts with portfolio suppliers, according to Platts Analytics
The imported LNG accounted for some 36 percent of the country's total natural gas consumption in 2016 and the proportion is expected to rise to 43 percent by 2040, according to an International Energy Agency report published in December.
According to the National Development and Reform Commission, domestic natural gas production in the first 11 months of this year amounted to 133.8 billion cu m, a year-on-year increase of 10.5 percent, whereas natural gas imports reached 81.7 billion cu m during the same period, up 28.9 percent year-on-year.
It's necessary to upgrade the country's capacity bottlenecks and logistics constraints to ensure gas supply, including pipelines, storage facilities and transportation networks, she said.
