China’s demand for LNG imports may double over next decade: largest US exporter Cheniere Energy

‘Everything is in place and heading towards a 130-to-140 million-tonnes market’ after 2023 import volume rose 12.6 per cent, says senior exec at firm
But total still lower than in 2021 as China grapples with diminished energy consumption amid Beijing’s efforts to boost domestic gas production

US-China relations

Ji Siqiin Washington

Published: 4:00am, 24 Jan 2024

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China’s demand for liquefied natural gas imports may double over the next decade, an official from America’s largest exporter of the commodity said on Tuesday, as the Asian country faces pressure to lower greenhouse gas emissions.

“Everything is in place and heading towards a 130-to-140 million-tonnes market in China alone, as we get towards the mid-30s-to-2040 time frame. Then we actually think it plateaus,” said Anatol Feygin, Cheniere Energy’s executive vice-president and chief commercial officer.

In 2023, China’s total LNG import volume reached 71.3 million tonnes, increasing by 12.6 per cent from a year earlier, according to Chinese customs data.

However, that was still lower than the record level of 78.9 million tonnes in 2021, as the country has struggled economically after the coronavirus pandemic, seeing diminished energy consumption amid Beijing’s efforts to boost domestic gas production.

The Aristidis I liquefied natural gas tanker is shown docked in December last year in Corpus Christi, Texas, where Cheniere Energy is expanding its operations for the highly sought commodity. Photo: Bloomberg

The world’s second-largest economy views natural gas as a transitional energy source while it shifts from traditional fossil fuels to renewables. Beijing has pledged to peak carbon emissions before 2030 and achieve carbon neutrality by 2060.

Natural gas emits almost 50 per cent less carbon dioxide than coal, the major primary energy fuel used in China.

“We’re proud to be part of that solution,” Feygin said on Tuesday during an online event organised by the Centre for Strategic and International Studies, a Washington-based think tank.

Feygin voiced confidence that China would meet its climate objectives and remain one of the major pillars of global LNG demand growth in the medium-to-longer term, along with South Asia and Southeast Asia.

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Currently, the country has more than 40 gigawatts of gas-fired power generation under construction, along with growing industry and residential commercial demand, suggesting rising opportunities for US exporters, he added.

“So we think that in those economics everybody wins.”

The United States has surpassed Russia to become the world’s largest exporter of LNG after the latter was mired in Western sanctions on its energy products following Moscow’s invasion of Ukraine.

China, meanwhile, is the world’s top buyer of LNG. Chinese energy firms have signed a record number of long-term contracts over the past few years, mostly with American and Qatari suppliers.

In November, China’s Foran Energy Group and Cheniere entered a long-term contract of purchasing around 0.9 million tonnes per annum of LNG for 20 years.

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The largest LNG exporter in America also has signed contracts for 20 years or more in the past two years with state-owned PetroChina and private firm ENN Natural Gas, supplying 1.8 million tonnes per annum with deliveries starting in 2026.

China has been increasingly reselling some of the super-chilled fuel to other Asian buyers to seek profit from price volatility, thanks to steady supplies from long-term contracts and its extensive terminal capacity.

Australia was China’s biggest LNG supplier in 2023, followed by Qatar and Russia, according to Chinese customs data.

The US ranked sixth by supplying 3.1 million tonnes of the fuel to the country, as its major flow of spot LNG has been redirected to Europe after the Ukraine war.

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