In 2020, China’s natural gas production reached 192.5 billion cubic meters, a year-on-year increase of 9.8%, of which coal-to-gas production was 4 billion cubic meters; coal-bed methane production 6.5 billion cubic meters; and shale gas production exceeded 20 billion cubic meters. In China, conventional natural gas reserves and production are insufficient to meet the growth in demand. With limited room for growth in China’s domestic natural gas production, importing natural gas is necessary.

As of the end of 2020, the total receiving capacity of China’s LNG terminals reached 87 million tonnes/year, a year-on-year increase of 14.2%, with an additional annual receiving capacity of 10.85 million tonnes/year. Besides, the potential of ongoing and upcoming projects is huge. If these projects are completed as scheduled, it is estimated that by the end of 2025, China’s LNG receiving capacity will be close to 180 million tonnes/year.

In 2020, There were 24 LNG import sources for China, among which Australia ranked first with 46% of imports and Qatar ranked second, followed by Malaysia and Indonesia. The top 5 import sources of pipeline gas were Turkmenistan, Uzbekistan, Kazakhstan, Myanmar and Russia.

In 2020, China imported 101.66 million tonnes of natural gas (about 140.3 billion cubic meters), a year-on-year increase of 5.3%. Among them, the import volume of LNG was 67.13 million tonnes, a year-on-year increase of 11.5%. The import volume of gaseous natural gas was 34.53 million tonnes, a year-on-year decrease of 4.9%. According to CRI, impacted by the increase of domestic gas production and the COVID-19 pandemic, the growth of China’s natural gas imports slowed down in 2020. China’s degree of dependence on imported natural gas was about 43% in 2020, 2% lower than in 2019.

In the first half of 2021, China’s natural gas imports increased significantly. According to China Customs, from January to June 2021, China imported 59.82 million tonnes of natural gas, an increase of 23.8% over the same period in 2020, and the import value was CNY136.24 billion, an increase of 9.5% over the same period in 2020.

During the first half of 2021, the growth of China’s natural gas imports mainly happened in LNG sector. The January and February of 2021 was the winter season in China, which was much colder than the same period in 2020. Temperatures in most parts of China plunged, so residents’ demand for LNG for heating rose sharply, prompting a significant increase in China’s LNG imports. As the temperature rose in March 2021, residents’ demand for heating weakened, and thus natural gas imports decreased. However, as the “coal-to-gas” project continued, industrial and commercial demand for natural gas kept growing, prompting China’s natural gas imports to increase again. On the whole, China’s natural gas imports increased significantly in the first half of 2021.

Regarding import sources, in the first half of 2021, China’s LNG imports were from 24 countries, of which Australia still ranked first in, accounting for 39% of imports. Malaysia ranked second, accounting for 12%, followed by Qatar, the United States, and Indonesia. China’s import sources of pipeline gas are relatively fixed. They are Turkmenistan, the Russian Federation, Kazakhstan, Myanmar, and Uzbekistan.

According to CRI, considering natural gas extraction in China, non-state-owned capital is subject to many restrictions. But private enterprises and foreign capital can invest in shale gas, coalbed methane, LNG, and terminal gas supply. These fields are currently encouraged by the Chinese government and enjoy certain preferential policies. For a long time, China’s LNG import companies were only China’s three state-owned petrochemical companies: CNPC, Sinopec and CNOOC. With the easing of Chinese government’s restrictions on LNG import, some non-state-owned enterprises have also gradually been allowed to import LNG and build LNG terminals.

According to CRI’s forecast, with the development of China’s economy, industry and urbanization, as well as its increasingly stringent environmental protection policies, the substitution of natural gas and LNG for coal is continuing. It is expected that China’s demand for natural gas and LNG will continue to rise in the next few years. In China, more than half of households still use wood or coal as their main fuel, which means that there is huge room for the expansion of natural gas and LNG market. As China’s domestic natural gas production has limited room for growth, it is expected that from 2021 to 2025, China’s LNG imports will continue to rise.

Topics Covered:

• The impact of COVID-19 on China’s LNG import
• China’s LNG production and consumption
• Analysis of China’s LNG imports, 2016-2021
• China’s main sources of LNG import
• Analysis of prices of domestic and imported LNG in China’s market
• The key influencing factors of China’s LNG import
• Forecast on China’s LNG import, 2021-2025

Related Report: Global Small Scale Lng Market Report- Global Strategic Analysis, Size, Share, Trend, and Forecast (2022-2029)
Related Report: Research Report on China’s Liquefied Natural Gas (LNG) Import 2023-2032

The post Research Report on China’s LNG (liquefied natural gas) Import, 2021-2025 first appeared on CRI Report.

The growing Chinese economy and stricter environmental protection policies drive the growth of natural gas consumption in China. In 2018, the Chinese government introduced several environmental protection policies to further prevent and control atmospheric pollution and replace coal with natural gas in key areas, which pushed up the natural gas consumption in China. According to CRI’s preliminary estimate, the consumption of natural gas in China exceeded 27 million cubic meters in 2018, registering a YOY increase of more than 10%.

CRI’s market survey shows that in 2018, the consumption of natural gas for power generation, household use and industrial purposes increased significantly while the consumption of natural gas in the chemical industry decreased slightly. The consumption of natural gas grew rapidly in the central and eastern regions which have a developed economy and high population density while grew slowly in the western regions. In 2018, the consumption of natural gas in provinces such as Hebei, Jiangsu and Guangdong all saw an increase of more than 3 billion cubic meters.

According to CRI’s analysis, as restricted by reserves and exploitation conditions, the production volume of natural gas in China has little growth potential. In 2018, the production volume of natural gas in China was about 160.30 billion cubic meters, representing a YOY increase of 8.30%, a growth rate far lower than that of the consumption volume. But it is noteworthy that the production volume of shale gas reached 11 billion cubic meters with a YOY increase of about 20%.

Because of insufficient domestic production, China needs to import a large quantity of natural gas to meet domestic demand. In recent years, China’s reliance on natural gas imports is rising sharply with the rapidly growing import volume of natural gas. In 2018, China surpassed Japan to become the world’s largest natural gas importer. According to CRI’s preliminary estimate, in 2018, the import volume of natural gas in China was about 90.39 million tons, representing a YOY increase of 31.80% and import reliance of more than 40%. The natural gas imports in China include pipeline natural gas and LNG.

As the import of LNG does not require pipeline construction and the shipping costs are low, LNG dominates China’s natural gas imports. According to CRI’s analysis, in 2018, the import volume of LNG in China reached 53.78 million tons, increasing by 41% YOY. The growth was mainly driven by China’s increasing demand for LNG, the use of new LNG terminals and the performance of new LNG contracts.

At the end of 2018, the annual handling capacity of LNG terminals in China reached 66.95 million tons. Phase I of the seven LNG terminals under construction had an annual handing capacity of 16.20 million tons. In addition, LNG terminals under extended construction in Tangshan, Qingdao and Rudong will see a significant increase in handling capacity after they are put into service.

According to CRI’s analysis, the natural gas importers in China have signed many LNG procurement contracts with global natural gas suppliers. For example, in 2018, China National Petroleum Corporation (CNPC) signed LNG import contracts with Cheniere, Qatargas and Exxon Mobil; China National Offshore Oil Corporation (CNOOC) signed LNG import contract with Petroliam Nasional Berhad (PETRONAS). In addition, CNOOC’s LNG contract with British Petroleum (BP) will be honored in 2019, which means that CNOOC’s new LNG contract volume will exceed 10 million tons/year.

Meanwhile, China is building long-distance pipelines to facilitate the transportation and allocation of natural gas on the domestic market. At the end of 2018, the total length of China’s long-distance natural gas pipelines was close to 76,000 kilometers. The Erdos-Anping-Zhangzhou Gas Pipeline (Phase I), Inner Mongolia-Shanxi Gas Pipeline (Phase I) and Chuxiong-Panzhihua Natural Gas Pipeline (a branch line of China-Myanmar Pipeline) have been put into service, and parts of the China-Russia East-Route Natural Gas Pipeline and the Qianjiang-Shaoguan Natural Gas Pipeline have been completed. Constant progress is being made in the construction of regional pipeline networks. For example, the construction of six major pipeline networks in the eastern, western and northern parts of Guangdong has been started and is planned to be completed at the end of 2020. With the construction of domestic long-distance natural gas pipelines, the number of natural gas users in China will keep rising, which will stimulate the consumption of natural gas.

As natural gas is environmentally friendly and easy to transport and use, the demand for natural gas in China is expected to keep rising from 2019 to 2023. As the growth rate of the production volume is far lower than that of the demand, the import volume of natural gas in China will keep growing from 2019 to 2023.

Topics Covered:

– Analysis on supply of and demand for natural gas in China

– China’s policies on natural gas import

– Volume and price of China’s natural gas imports

– Progress in the construction of LNG terminals and natural gas pipelines in China

– Major sources of China’s natural gas imports

– Analysis on factors influencing natural gas import in China from 2019 to 2023

– Forecast on natural gas import in China from 2019 to 2023

The post Research Report on Natural Gas Import in China, 2019-2023 first appeared on CRI Report.