China’s LNG imports are expected to expand by 10% to reach a record level in 2020 thanks to robust industrial and residential demand after the world’s second-largest economy emerged from the COVID-19 pandemic. China’s total natural gas imports are projected to grow by 4-6% this year, making it an outlier in the world’s gas market which is expected to shrink by about 4% due to the coronavirus-related lockdowns.
Analysts and traders expect China’s LNG imports to hit a record high of about 65-67 million tons in 2020, 10% higher than last year’s level. With such a growth rate, China is expected to dethrone Japan as the world’s largest LNG buyer by 2022. Earlier this year, Chinese LNG importers went into a buying spree, snapping up cargoes from Qatar, Russia, and Australia amid record-low prices as demand weakened elsewhere.
China’s LNG imports rose 10.3% year-on-year to 42.2 million tons in the first eight months of 2020, Chinese customs data showed. In contrast, imports of piped gas fell 7.4% over the same period. Importing LNG is more competitive despite a recent increase in spot pricing, a source with a Chinese importer said.
China has pledged to reach carbon neutrality by 2060 and sees natural gas as a transitioning fuel to reduce its carbon emissions. Since 2016, millions of Chinese households and thousands of factories have switched from coal to gas.
