China became world’s second largest importer of liquefied natural gas

Almaty. December 27. Silkroadnews - China has become the world’s second largest importer of liquefied natural gas, specialized information portal Oil Price says.
“China has this year become the world’s second-largest LNG importer after Japan, analysis of shipping data from Reuters Eikon has revealed. Asia’s number-one economy imported around 38 million tons of liquefied natural gas this year, an over 50-percent annual increase. To compare, Japan’s LNG imports this year stood at 83.5 million tons, while South Korea’s were about 37 million tons,” the report said.
According to Reuters, this development will be the major incentive for the spot market in Asia, as Chinese LNG buyers are much more supportive of short-term contracts than long-term deals, unlike buyers in Japan and South Korea. In fact, the emergence of China as a major buyer of LNG significantly changes the market.
“The emergence of a spot market is one of these ways, which undermines the established tradition of long-term contracts for LNG supplies with prices linked to oil benchmarks. The benefits of long-term supply contracts are reduced price volatility and security of supply – both Japan and South Korea are entirely dependent on imports to satisfy their demand for gas,” the publication explains.
China increased its LNG consumption and reduced consumption of coal to combat winter smog. This disrupted the market structure, yet caused a sharp jump in prices, which greatly pleased LNG exporters, who decided to take advantage of situation favorable for them until it ended.
The report says about forecasting of LNG glut, and the International Energy Agency, in October, said it expected the global LNG market to remain oversupplied until the mid-2020s.
It is noted that the three largest LNG importers in the world together consume 60% of the world’s LNG supply. The three leading exporters - Qatar, Australia and Malaysia - meet 60% of global demand.