China’s customs data showed that imports of natural gas as LNG and through pipelines rose in August compared to a year earlier, with pipeline gas delivery increased for the first time this summer. According to the data. LNG imports climbed from 5.19 million tons in August 2019 to 5.96 million tons in 2020, a year-on-year increase of 16%, which followed a 4% rise in July. Pipeline gas deliveries also expanded by 8% from 3.15 million tons to 3.4 million tons over the same period, marking the first increase since January-February.
Market participants said low spot prices might have encouraged Chinese LNG importers to ramp up purchases ahead of the winter. Meanwhile, gas pipeline buyers may have to start ramping up deliveries to fulfil term obligations by the end of the year. Despite stronger pipeline shipments, market participants expect sufficient room for further increase in LNG imports as domestic output growth continues to slow.
The National Energy Administration (NEA) said domestic gas production to grow by 4.6% in this year, meaning that production in September-December would be 3.6% below the target. Russia’s Gazprom delivered 2.3 Bcm of gas to China through the Power of Siberia pipeline, meaning that it will need to ship 2.3 Mcmd through December to meet this year’s target of 5 Bcm. However, recent planned work on the line may have reduced flows this month, providing more space for LNG imports.
