LNG imports may reach record levels in 2024

Company executives and experts say that driven by strong demand from the industrial sector amid economic recovery and industrial decarbonization, China’s liquefied natural gas imports could reach record levels in 2024.

China, the world’s largest importer of the super-chilled fuel, aims to import about 80 million metric tons of LNG this year, driven by increased demand from the industrial and commercial sectors, said Zhang Yaoyu, global head of LNG and new energies for PetroChina International under China National Petroleum Corporation.

LNG imports to China increased by 12.6% in 2023. year on year, to 71.32 million tons, overtaking Japan as the largest LNG importer in the world. This was a significant increase compared to 63.44 million tons of LNG imported in 2022.

China has already shipped almost 20 million tonnes of LNG in the first three months, with the chemical, paper, steel and cement industries driving demand growth, helping to reach the estimated 80 million tonnes, Zhang said.

Li Ziyue, an analyst at BloombergNEF, said that amid the country’s energy transition, China has become a dominant force in the global LNG market.

The fastest growth in gas consumption in the transportation sector, seen as a relatively clean bridge fuel, is expected to be driven by the profitability of natural gas-powered commercial vehicles, she added.

Domestic state-owned enterprises have also contributed to China’s increased LNG handling capacity, while private companies are playing an increasingly active role in building LNG terminals, she added.

She added that about 60 percent of the LNG installations under construction belong to state-owned enterprises and the rest to private domestic companies.

BloombergNEF reported that it expects China’s underlying natural gas demand in 2024 to grow 8 percent year-on-year to 421 billion cubic meters, while LNG imports are estimated to grow 17 percent year-on-year this year to 81 billion cubic meters. million tons.

The largest increase in gas consumption in the transportation sector is expected to occur in the warmer months (April to September) due to the good economics of natural gas-powered commercial vehicles, he said.

Chinese companies are on track to buy more LNG than any other country in the long term as they look to sign more deals to avoid possible shortages and reduce dependence on point supplies. Of all the world’s long-term liquefied natural gas volumes last year, 33 percent went to China, according to Bloomberg.

According to Shell’s LNG Outlook 2024, the global LNG market will continue to grow into the 2040s, mainly driven by industrial decarbonization in China.

The development of China’s gas infrastructure has been accelerating in recent years, and the long-term prospects for gas and LNG demand in China remain good as the country also diversifies its import destinations, he said.

“China is likely to dominate LNG demand growth this decade as its industry seeks to reduce greenhouse gas emissions by switching from coal to gas,” said Steve Hill, executive vice president of Shell Energy.

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