CHINA’S imports of liquefied natural gas (LNG) will likely grow 10 percent 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 to 6 percent this year, China is the only major bright spot on the world gas market, where demand is set to fall by about 4 percent as the global economy contracts due to coronavirus lockdowns.

LNG imports are set to hit a record 65 to 67 million tons this year, analysts and Chinese traders estimate, a 10th 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 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.

Imports of LNG in the first eight months of the year rose 10.3 percent over a year ago to 42.2 million tons, while piped gas fell 7.4 percent, Chinese customs data showed.

(SD-Agencies)