The potential and opportunities in Guangdong LNG market

Gas plays an important part in Guangdong’s goal to achieve carbon peak by acting as a transitional fuel. The province is China’s largest gas-consumer and LNG importer with 39 billion cubic metres (bcm) and 21 million tonnes (Mt) coming into the province in 2023. As the leading economy of all China’s provinces, the potential of its gas demand is considerable.  

Much of this is owing to the gas demand growth in industrial and power sectors. The provincial policies also support gas industry expansion by encouraging supply source diversifications, consumption expansion, pipeline penetration and tariff reductions. All of which favour every player in the gas market. 

The following extract is from our Guangdong LNG potential and opportunities report. You can purchase this report here.

Planning for growth 

Driven by expanding infrastructure and energy demands, Guangdong's LNG market is set for significant growth. With an extensive intra-provincial pipeline network now covering all 21 cities, the province's gas demand is set to rise.  

The network is operated by PipeChina Guangdong Company and ensures equal access for all market players. As they shift towards higher value-added manufacturing and household incomes increase, the province is better positioned to absorb potential price hikes through cost pass-through mechanisms.  

Investment in expanding regasification capacity, offshore pipelines and LNG output connections, will be crucial for meeting the growing demand and maintaining supply stability in the future. 

Gas demand driver 

Guangdong’s gas demand will jump from 39 bcm in 2023 to 62 bcm in 2030. Economic growth, new grid connections and power demand growth drive this 6.9% year-on-year increase. The power and industrial sectors account for more than 85% of total gas demand throughout the forecast and are also the main growth drivers. 

Industrial gas demand will grow at an average annual rate of 5.7% until 2031 when it is projected to peak. This growth reflects the province's strong industrial base and the increasing need for reliable energy sources to support manufacturing and other energy-intensive activities. 

Gas power is another significant driver of Guangdong's LNG demand, playing a critical role in ensuring the resilience and flexibility of the province's power system. Although Guangdong aims to grow its offshore wind and solar energy, the intermittency of these renewable sources requires a substantial increase in gas-fired power capacity. The province's gas power capacity was 38.7 GW in 2023 but is expected to reach over 80 GW by the late 2030s.