Beijing is reportedly turning from a net importer into an international seller of the fuel
© Getty Images / CHUNYIP WONG
Chinese importers of liquefied natural gas (LNG) have been securing new contracts with world suppliers in a bid to boost Beijing’s presence on the global LNG market, Reuters reported this week.
The news agency said Chinese gas traders have been setting up new trading desks or expanding existing ones in Singapore and London, putting them in direct competition with LNG heavyweights such as Shell, BP, TotalEnergies, and Equinor.
Traders and analysts told the outlet that Chinese importers have also ramped up the scale of long-term LNG contracts with Qatar and US suppliers by nearly 50% since late 2022 to more than 40 million metric tons per year, and plan to add further volumes from those two countries, as well as Oman, Canada and Mozambique.
According to the report, citing consultancy Poten & Partners, Chinese companies are expected to have contracted LNG supplies of more than 100 million tons a year by 2026.
The soaring LNG imports have propelled the country past Japan to become the world’s leading importer of the fuel. Large volumes of LNG have been arriving in China from Russian plants in the Far East and the Arctic region.
Experts say that Beijing’s growing domestic output and piped gas from Central Asia and Russia provide enough of a fuel base that Chinese gas companies can trade or swap US and other portfolio cargoes.
READ MORE: Chinese imports of Russian gas soar
“We’re going to see a paradigm shift in Chinese companies from being total net importers to (being) more international and domestic trading players,” the Shanghai-based head of global trading for Trident LNG, Toby Copson, told Reuters. He noted that state-run PetroChina, Sinopec, Sinochem Group and CNOOC are already actively trading volatility to capitalize on their long portfolios.
Jason Feer, head of business intelligence at Poten & Partners, also said he could see China becoming “a seasonal seller to places like Southeast Asia, South Korea and Japan, as well as into Europe.”
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