China’s natural gas imports through pipelines are seen to fall in the rest of 2020 amid low spot LNG prices which lead to aggressive pricings of LNG truck supplies. The fierce pricing competition from LNG truck sellers has prompted state-owned CNPC, China’s only pipeline gas importer to cut pipe gas imports. Market participants noted that the prices for LNG truck supply from import terminals had dropped to below domestically-produced LNG
Preliminary customs data suggests that Chinese pipeline gas imports in May will likely be below 2 million tons, the lowest since November 2016. If materialized, it would be the third straight months of decline in pipeline gas imports.
China’s total gas imports reached 40.12 million tons in the first five months of 2020, 1.9% higher than in the same period last year. In May, LNG imports increased by 21% year-on-year to 5.9 million tons. Low prices are expected to drive growth in LNG imports in the rest of 2020. Meanwhile, pipeline gas imports are expected to fall due to seasonal demand decreases.
