China LNG: eyes on the prize for global players

Chinese LNG demand has seesawed in recent years. Improved domestic gas demand and softer global LNG prices helped imports rise by 9% to 77 million tonnes in 2024. However, mild winter weather, economic headwinds and domestic gas supply growth saw imports decline by 23% in the first five months of 2025, with risks skewed to the downside over the rest of the year. As a result, we expect total demand for 2025 to fall to below 70 million tonnes. 

From 2026, however, market dynamics will evolve more positively. China’s potential as a strong market for LNG should continue well into the next decade, despite plans for greater energy independence; our projections forecast demand peaking at around 140 million tonnes per year (mmtpa) in the mid-2030s, before declining gently to 2050. After that, a shrinking population, slowing growth and renewables penetration will begin to reduce gas demand, while additional supply from new pipeline projects will limit LNG’s market share. 

Read on for insight into the key factors set to shape China’s market over the next decade, as well as the risks and uncertainties that could affect demand. 

Chinese LNG demand should rebound in 2026 

From 2026, Chinese gas demand should regain momentum, driven by softening prices and an economic recovery. LNG will be more price-competitive against other fuels, while flat Russian gas imports will mean it should benefit from the additional gas demand created by economic growth. Peaking coal demand and improved gas infrastructure should also be supportive.  

Limited pipeline import growth and softening global LNG prices should support longer-term demand 

Pipeline imports are a direct competitor to imported LNG, particularly in the north and east coastal regions. Between 2026 and 2032, new pipeline imports will be limited exceptthe Power of Siberia 1 pipeline expansion and the commission of Russia’s Far East pipeline. When combined with soft global LNG prices in this period, this should result in healthy LNG demand growth well into the next decade. 

Contracted LNG demand will be strong, with uncontracted demand also growing post-2030 

High gas prices and a volatile spot market in the 2021-23 period saw the three Chinese national oil companies (NOCs) taking out huge term contracts to secure supply and diversify resources. Although contracting has slowed somewhat, Chinese buyers continue to feel comfortable committing to long-term contracts, with non-NOC buyers also getting involved. Spot LNG demand will be limited in the near term, but from 2026 onwards, a growing supply/demand gap will drive rising uncontracted demand that should then stay at a healthy level through to 2050.   

Regas overcapacity means terminals are diversifying 

With 161 mmtpa of capacity operational and a further 110 mmtpa under construction, China’s buildout of regasification facilities for LNG has outpaced demand growth. With utilisation rates falling, terminals are diversifying into bonded storage, reloading and bunkering of LNG to boost revenues. This is part of a broader trend towards integrated energy logistics hubs that support greater flexibility, commercial access and supply chain integration. 

Risks to demand growth  

Despite healthy growth potential, China’s LNG demand faces various risks and uncertainties: 

Extended coal use: While environmental advantages have been a key driver of gas demand growth, coal remains the cheaper option. In theory, China remains committed to peaking coal demand by 2030, but with energy security a growing priority, the approval of coal-fired projects has resumed. 

Renewable deployment: The accelerated deployment of renewable power generation capacity including wind and solar is a key element of China’s drive for greater energy independence, and a major potential headwind for gas demand.  

Local government policy: Supportive policies and financial backing remain critical to expanding gas demand; local government debt levels are a concern in this respect, with inland provinces most likely to be forced to limit subsidies if the Chinese economy underperforms. 

Additional pipeline projects: China is exploring several major additional pipeline options, including Power of Siberia 2 and Centra Asia Line D, along with an upgrade to Power of Siberia 1. Their progress or delay will have a significant influence on Chinese LNG demand. 

Deep shale gas development: In recent years, CNPC and Sinopec have started developing deep shale gas in the Sichuan basin, the only resources suitable to significantly increase domestic production. Despite short-term challenges, this could dent LNG demand post-2030. 

Global trade challenges: The tariff war started by the second Trump administration has put US LNG imports to China on hold and made Chinese buyers increasingly cautious about direct purchases of large volumes of US LNG. The economic headwinds created by these trade wars are likely to favour policy support for coal and renewables, while pressuring demand for gas and LNG. 

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