China signed record high 22.7 mil mt of LNG term contracts in 2021: CNPC ETRI
China signed a record high 22.7 million mt of LNG term contracts in 2021, up 516% year on year, with some contracts starting delivery in 2022, which will boost LNG imports in coming years, state-owned oil and gas company CNPC’s Economics & Technology Research Institute, or ETRI, said in its latest report published in the week starting April 10.
ETRI said China’s natural gas imports in 2022 are forecast to reach a total of 185 Bcm, up 10.1% year on year, supported by incremental volumes through the Russia-China natural gas pipeline’s eastern route and the commissioning of new LNG terminals such as Zhangzhou and Binhai LNG terminals.
China has increased its pipeline gas imports from Russia to 43 million cu m/day or around 15 Bcm/year since December 2021, and the volume is expected to further increase with more pipeline facilities completing constructions, ETRI said, noting that the total length of China’s long-distance natural gas pipeline has reached nearly 84,000 km as of 2021.
China overtook Japan to become the world’s biggest LNG importer in 2021, and its total LNG receiving capacity has reached 91.3 million mt/year by the end of the year, according to ETRI.
China’s natural gas production is expected to reach 221.6 Bcm in 2022, up 6.2% on the year, slightly higher than the target of 214 Bcm for 2022 set by the National Energy Administration in its work guidelines released on March 29.
China’s natural gas production was 208.6 Bcm in 2021, including 23 Bcm of shale gas, 10.5 Bcm of coal-bed methane and 4.6 Bcm of coal gas, up 16 Bcm or 8.3% year on year, according to ETRI.
Domestically produced natural gas is expected to account for 55% of the country’s total natural gas supply, while imported LNG and pipeline gas are estimated to account for 30% and 15% of the total supply in 2022, respectively, ETRI data showed.
China’s natural gas demand is also expected to grow by 8.2% in 2022, slowing from 12% in 2021, with the largest growth coming from the power generation and industrial sectors, as the country adds around 10 GW of new installed gas power generation capacity this year, ETRI said.
“There’s still room for peak shaving demand for natural gas power in the east and south China where environmental protection policies are relatively stricter,” an analyst with ETRI said.
“Overall city gas demand will remain stable this year, with main growth coming from urban residents and heating demand, but there are some uncertainties in the demand increase from coal-to-gas switching in rural areas and commercial and service sectors,” the analyst said.
China has relaxed the coal-to-gas switching policy in rural areas, while natural gas demand growth is expected to be dampened by tighter COVID-19 restrictions this year, the analyst said.