CHINA LNG IMPORTS UP

REUTERS - SEPTEMBER 25, 2020 -  China's imports of liquefied natural gas will likely grow 10% to new highs this year as companies scoop up cheap supplies to cover increasing industrial use and robust residential demand.

With its total natural gas use likely expanding at 4-6% this year, China is the only major bright spot on the world gas market, where demand is set to fall by about 4% as the global economy contracts due to coronavirus lockdowns.

LNG imports are set to hit a record 65-67 million tonnes this year, analysts and Chinese traders estimate, a tenth more than 2019's total and at a growth rate that could see China overtake Japan as the world's top buyer by 2022.

Some analysts believe China's economy is now pretty much back to its pre-virus growth path.

"After taking a brief hit earlier this year due to the COVID-19 pandemic, China's gas demand recovered faster than expected, driven mostly by the industrial sector that has recovered to 2019 levels since May, " said Alicia Wee, analyst at FGE.

Companies booked more super-chilled gas from Qatar, Russia and Australia, taking advantage of record-low prices LNG-AS earlier in the year as demand sagged elsewhere.

To accommodate higher LNG imports, top gas importer PetroChina reduced costlier pipeline supplies from central Asia, mainly Kazakhstan, using contract tolerances, said a Beijing-based PetroChina official.

"(Fourth-quarter)imports will remain robust...as LNG is both more competitive and flexible versus pipeline gas, despite a recent spot price spike," Lu Xiao, senior analyst at IHS Markit.

January-August imports of LNG rose 10.3% over the same year-ago period to 42.2 million tonnes, while piped gas fell 7.4%, Chinese customs data showed.

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