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China smashes LNG growth record – here’s why
*Please note that this report only includes an Excel data file if this is indicated in "What's included" below
Report summary
China's LNG import growth increased by 12.1 Mt in 2017, breaking the previous record set by Japan in 2012 (8.8 Mt) in the wake of the Fukushima disaster. Total LNG imports reached 38.3 Mt, surpassing South Korea. In fact, demand could have been even higher but were constrained by terminal and trucking capacity. As a consequence of this growth, Chinese companies entered the spot market in a big way, purchasing 8 Mt, mainly by CNOOC and CNPC, as their over-contracted positions cleared. We assess the drivers of this record growth and how it impacted seasonality, shipping, contracted positions and pricing. What also are the implications of this demand boom for 2018?
Table of contents
- Highlights
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LNG Demand
- China sets growth record and overtakes South Korea as the 2 nd largest LNG importer
- LNG demand in Northern China is growing quickest
- Winter LNG imports could have been higher, but were constrained by terminal and trucking capacity
- Seasonality of LNG imports varies by region: not just a winter heating story
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LNG Trade
- China is no longer over-contracted on a national basis
- China looks further afield for LNG and boosts its shipping demand
- LNG Corporates
- CNOOC's market share declined due to stronger LNG demand in the north
- PetroChina's spot purchase reached 4.5 Mt in 2017
- Sinopec was still over-contracted in 2017
-
LNG Infrastructure
- Insufficient storage capacity continues to be the Achilles' Heel
- Utilisation rates of terminals increased, and capacity became a constraint in winter
- Third-party access (TPA) progressed slowly and LNG terminal ownerships diversified
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LNG Prices
- China's average LNG import price increased, but the gas bill is a fraction of total energy trade
- Spot LNG is competitive, except in winter
- LNG downstream markets experienced huge price volatility in winter
- What to watch in 2018
Tables and charts
This report includes the following images and tables:
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LNG demand growth in 2017 by regionMonthly LNG imports 2015- 2017LNG supply structure 2017 vs 2016
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Spot LNG purchase in 2017China LNG imports by source countryChina LNG imports by supply basinChina LNG imports by supply basin (tonne-miles)China LNG imports by average distance travelledChina LNG imports by supply basin (tonne-miles)Monthly imports by CNOOC and its JVs in 2017Monthly imports by PetroChina in 2017Terminal utilisation rates
- 5 more item(s)...
What's included
This report contains:
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