China 2023 gas demand likely to grow, but LNG outlook cloudy
Natural gas demand in China is likely to grow this year as the economy recovers, but whether the country’s imports of liquefied natural gas (LNG) rebound will depend on spot prices, an executive of PetroChina International said.
China’s LNG imports dropped nearly 20% to 63.4m tonnes last year, pushing it down to the world’s No.2 LNG buyer behind Japan as zero-COVID lockdown measures and high spot prices hit demand, Reuters reported.
“We expect consumption of natural gas to return to a healthier level this year compared to 2022,” Yaoyu Zhang, general manager of global LNG and new energies at PetroChina International, told Reuters on the sidelines of an energy conference in Tokyo.
China’s apparent gas consumption was 366.3 billion cubic metres in 2022, down 1.7% from the previous year, data from the country’s National Development and Reform Commission showed.
“This year, we expect at least the same level (as in 2022) – we believe there could be slightly more given recovery of the (Chinese) economy,” Zhang said.
PetroChina, the listed arm of the state-run China National Petroleum Corporation, is the country’s top gas importer. LNG is used to supplement domestic gas production and pipeline imports.
As China’s economic activity ramps up following the end of lockdowns, its domestic LNG demand could increase by 10% this year, the International Energy Agency has said, but Zhang remained cautious with predictions.
“This year, we are going to take a similar approach depending on the price level on the spot market, then we will decide do we want to buy more or less,” Zhang said.
“If the spot LNG prices remain high like last year, we don’t expect a quick rebound of the LNG purchases in China.”
Russia is one of the key sources for pipeline and LNG supplies to China.
Zhang noted PetroChina, via CNPC, is a partner in the Yamal LNG and Arctic LNG 2 projects in Russia and buys Russian gas via pipeline.
“I don’t expect these relationships to stop because at the moment there are no sanctions on LNG. I think it will be business as usual – we will lift our equity volumes – pipeline and LNG,” he said.
Russia wants to increase pipeline gas supplies to China via new routes especially as it suffers a decline in its once core European market.