China is on track to overtake Japan this year as the world’s top importer of LNG, according to a new report from Banchero Costa.
In 2018, China’s imports of LNG soared 40.4%year-on-year to a record 53.8m tonnes, according to figures from the General Administration of Customs.
China retained its position as the world’s second largest importer of the commodity after Japan, having overtaken South Korea in 2017.
Chinese imports in the first five months of 2019 are up 20.4% year-on-year to 23.9m tonnes, according to Banchero Costa.
The market is very much dominated by Asia, which accounts for 75% of global LNG imports. The three countries of China, Japan and South Korea by themselves account for 55% of global LNG imports.
In terms of supply, the big winner at the moment is Australia, which in the January to May period accounted for 52% of China’s total LNG imports, up from the 45% share Australia had in the same period last year.
“With more projects coming on stream, such as Shell’s Prelude facility in the northwest of the country, Australia is on track to soon overtake Qatar as the largest exporter of LNG,” Banchero Costa predicted.
Qatar has seen its Chinese market shrink to just 16% in the first five months of 2019, from 20% in the same period last year.
Meanwhile, the trade war clearly had an impact on US exports of natural gas. Volumes of LNG from the US to China fell by 86% year-on-year. So far this year, the US had just a 1% share of the Chinese LNG market, down from 9% last year.
Aside from Australia, another producer which is benefiting from this realignment in trade is Papua New Guinea, which almost doubled both its volumes and its market share in China – from 3% to 6%.