Iran Energy News Oil, Gas, Petrochemical and Energy Field Specialized Channel
Related Articles
China is likely to favor liquefied natural gas (LNG) imports over pipeline gas supply until 2027, Fitch Solutions said on Monday.
The super-chilled fuel will continue to be dominant over piped gas imports because of rampant expansion of domestic LNG import capacity. In addition, it will take the Power of Siberia pipeline five years to ramp up to optimal capacity, Kallanish Energy reports.
According to the Fitch Solutions Country Risk & Industry Research, Chinese state-owned enterprises and non-state firms are planning to bring online some 80 billion cubic meter (Bcm) of LNG regasification terminals over 2020-2024.
“These alone could pave the way for more than 40 Bcm of additional LNG imports, assuming conservative utilization rate of 55-60%,” it said.
Fitch analysts believe that U.S. LNG is most likely to fill in the annual gas deficit currently estimated at around 35 Bcm/y, due to their bilateral trade agreement. Under the Phase One deal signed in January, China has to import an additional $52.4 billion of American energy products, including LNG.
Despite the coronavirus outbreak in China earlier this year and substantial demand disruption, the country maintained its natural gas imports “resilient” in the first quarter of the year.
Fitch estimates the Asian giant imported 33.6 Bcm in Q1 – which is a 2.1% increase over the 32.9 Bcm imported a year earlier. This happened even though some importers postponed cargoes scheduled for deliveries in the Jan-March period.
The analysts believe LNG imports during the first two months of 2020, when the pandemic peaked in China, were probably supported by higher domestic household consumption and opportunistic purchases taking advantage of low spot prices.
Citing satellite images of emissions across industrial clusters, the analysts said there were signs of a rebound in industrial activity and gas demand in March-April. LNG imports in Q1 were led by Australia, Qatar and Malaysia.
Fitch said Power of Siberia gas pipeline, running from Russia to China, will transport 5 Bcm of gas this year and reach its 38 Bcm/y full capacity in 2025.
