China’s monthly LNG offtake in December amounted to 7.11mmt, our data showed, which constituted strong monthly demand growth of 0.84mmt (13 percent) from the 6.27mmt we recorded in November.
At 13.38mmt in total, Chinese demand during the reporting period of November and December thus grew robustly by 3.70mmt (38 percent) from total imports of 9.68mmt during the preceding two-month period of September and October. China’s LNG imports in September and October stood at 4.91mmt and 4.77mmt, respectively. Accordingly, China’s annualised LNG import capacity during the reporting period stood at roughly 85 percent, up 24pp from the previous reporting period of November-December. However, the amount imported during the reporting period still constituted a significant net decrease of 1.68mmt (-11 percent) from the 15.06mmt we recorded during the November-December period of 2021, which was reflective of the continuing effect of Europe’s demand vortex as well as the continued drag on Chinese economic output by anti-coronavirus measures during most of the reporting period.
Prices
Our calculations based on Chinese customs data indicate a cooling-off of China’s landed LNG prices during the reporting period, which peaked at US$34.05/mmBtu in November and US$38.8/MMBtu in December. Whilst still high, these not only represented a significant cooldown from prices as high as US$49.33/mmBtu in August, but they also remained below the high-water mark of US$40.37/mmBtu in November/December 2021.
Parts of China continued to be subject to intermittent coronavirus-related lockdowns, which likely dampened the domestic energy demand growth rate. These measures continued to put significant pressure on domestic LNG prices and thus created a sizeable gap in landed prices, Chinese customs data indicate. The Pacific market continued to be tight and spot cargoes still demanded a steep premium as also Japan increased buying activity significantly alongside high European demand, our data showed.
Chinese domestic LNG prices continued to slide in November following their peak of US$27/mmBtu in March but climbed swiftly in December. In the current reporting period of November/December, the highest privately quoted domestic price had decreased to US$15.20/mmBtu on 1 November before climbing to around US$23.69/mmBtu by mid-December. Nevertheless, the average Chinese domestic LNG price during the reporting period remained below its September/October equivalent. The current reporting period’s average price stood at US$ of US$16.60/mmBtu compared to US$18.21/mmBtu for September/October.
Meanwhile, the average domestic price indicated by the National Bureau of Statistics (CNBS) stood at US$20.60/mmBtu for December (the most recent available full-month dataset by the CNBS), which represents an increase of US$4.36/mmBtu (27 percent) from US$16.24/mmBtu in November.
North China
LNG demand grew steeply in the north of China during the reporting period, with offtakes increasing by 2.52mmt (103 percent) from 2.45mmt in the two months of September-October to 4.97mmt for the reporting period of November-December. The largest shares of LNG influx into the region during the reporting period took place via the Caofeidian LNG terminal. However, the sum of LNG imports of 4.97mmt in northern China for the period of November-December 2022 was still significantly behind its equivalent of 6.01mmt in 2021, down by 1.04mmt (-17 percent).
China’s North again led by Caofeidian LNG
Leading the roster of northern terminals by volumes imported, Caofeidian LNG took in 1.45mmt during the reporting period of November-December. This constituted a steep i ncrease in offtakes by 1.08mmt (292 percent) compared to the previous two-month period. Imports consisted predominantly of nine Qatari cargoes from Ras Laffan LNG amounting to 0.91mmt. Russia delivered five cargoes, s upplying 0.33mmt in the process. In addition, Australia’s Australia Pacific LNG supplied two c argoes of 0.07mmt each whilst Malaysia LNG s upplied the remaining cargo of 0.07mmt.
Tianjin LNG
Imports at Tianjin LNG amounted to 1.10mmt, up 0.77mmt (233 percent) from 0.33mmt in September-October, according to our data. The bulk of these imports came from Australia, amounting to 0.48mmt via seven cargoes supplied by Gorgon-, Queensland Curtis-, Wheatstone- and Australia Pacific LNG. T he United States supplied three cargoes totalling 0.16 whilst Qatar shipped 0.12mmt. T he roster of Tianjin LNG’s imports was completed by five cargoes stemming from Russia’s Yamal and Sakhalin-2 LNG as well as Indonesia’s Bontang plant and one re-export each from Zeebrugge and Singapore.
Tianjin - Nangang LNG
Tianjin - Nangang LNG, meanwhile, had offtakes amounting to 1.07mmt over the reporting period compared to 0.84mmt in September-October. The terminal thus saw an increase in imports of 0.23mmt (27 percent). Cargoes comprised eight from Australia Pacific LNG amounting to 0.60mmt, three US shipments from Calcasieu Pass and Sabine Pass LNG totalling 0.23mmt, two from Ras Laffan amounting to 0.18mmt and one of 0.06mmt from Sakhalin-2 LNG.
Qingdao LNG and Dalian LNG
The remaining two northern terminals – Qingdao LNG and Dalian LNG – imported 1.05mmt and 0.30mmt over the reporting period, respectively, which in the case of Qingdao LNG stemmed predominantly from Australia with 0.40mmt. Nine cargoes totalling 0.65mmt from Papua New Guinea, Qatar, Indonesia and Russia completed imports at Qingdao.
November-December supply to the Dalian terminal came mainly from the United States’ Sabine Pass and Corpus Christi LNG terminals, which accounted for 0.16mmt, as well as 0.08mmt from Gorgon LNG and 0.06mmt from Sakhalin-2 LNG.
East China
At the time of writing, demand in East China was dominated by the wider Shanghai area, where Jiangsu LNG imported 1.34mmt during the reporting period. This placed the terminal third among China’s leading terminals in November-December. Accordingly, it o perated at well-above nameplate capacity. However, overall LNG demand in East China h ad decreased by 0.10mmt (-3 percent) to 3.29mmt in November/December from the 3.39mmt we recorded in September-October.
Wider Shanghai area
The remaining wider Shanghai area – c omprising Qidong LNG, Shanghai LNG, the metropolis’ peak-shaving facility as well as China’s latest terminal additions Pinghu LNG and Jiangsu Binhai LNG– imported a total of 0.89mmt over the reporting period, down 0.20mmt from the 1.02mmt recorded in September-October on account of a lack of c argoes going to Qidong LNG and Jiangsu Binhai LNG as well as only half the previous period’s imports of 0.12mmt going to Pinghu L NG. Pinghu LNG receives its cargoes from Malaysia LNG under a long-term contract. The three terminals aside, the sub-region’s imports were led by the Shanghai LNG terminal, which took in 0.71mmt as it boosted imports by 0.28mmt (65 percent) period-on-period. Shanghai’s peak-shaving facility was also seen i n the market with three imports totalling 0.12mmt, up 0.04mmt (50 percent) from September-October.
Zhejiang & Zhoushan LNG
At the neighbouring terminals Zhejiang and Zhoushan LNG, imports amounted to 0.78mmt and 0.28mmt, respectively. Zhejiang L NG’s offtakes had thus decreased by 0.27mmt (-26 percent) compared to September-October after it had reached its throughput c apacity ceiling during the previous reporting period. Meanwhile, Zhoushan LNG continued to increase imports period-on-period by 0.06mmt (27 percent) to 0.28mmt from 0.22mmt. LNG to Zhejiang LNG was mainly s upplied by Qatar, with four cargoes totalling 0.33mmt stemming from Ras Laffan whilst Queensland Curtis LNG in Australia supplied five shipments totalling 0.31mmt. Russia’s Y amal LNG also supplied 0.07mmt via one c argo alongside a shipment of 0.07mmt from Malaysia LNG. Zhoushan’s four imports totalling 0.28mmt came from Gorgon LNG in Australia, Idku LNG in Egypt and Ras Laffan in Qatar. Zhoushan is one of the few Chinese LNG i mport terminals not controlled by one of the state-owned petrochemical giants PetroChina, S inopec and CNOOC.
South China
Regional imports in South China – where L NG demand is primarily determined by the southern industrial centre of Shenzhen – saw a significant demand increase in November-December, our data showed. The region’s imports amounted to 5.12mmt over the reporting period, which meant they were up by 1.28mmt (33 percent) from the 3.84mmt recorded in September-October.
Shenzhen terminals
South China’s imports were still led by Shenzhen’s active terminals – Guangdong Dapeng and Shenzhen Diefu LNG. Dongguan LNG and the adjacent peak-shaving facility, on the other hand, continued their market absences. The region’s most prominent terminal – Guangdong Dapeng LNG (GDLNG) – saw offtakes of 1.85mmt, placing it first among China’s terminals. At 1.85mmt, the terminal had increased its November-December imports by 0.12mmt (7 percent) from 1.73mmt during the previous two-month period. Guangdong Dapeng LNG’s average capacity utilisation stood at 163 percent over the reporting period, which resulted in neighbouring Shenzhen Diefu LNG importing 0.68mmt and pegging its terminal utilisation at 102 percent. Shenzhen Diefu usually steps in when GDLNG’s throughput requirements are stretched beyond capacity.
Zhuhai and Jieyang LNG
Zhuhai LNG increased offtakes by 0.20mmt (45 percent) to 0.64mmt over the reporting period from 0.44mmt the previous period, which pegged overall capacity utilisation at 114 percent. The roster of Zhuhai’s imports came from a wide variety of sources including Malaysia, Australia, the United States, Equatorial Guinea, Nigeria, Malaysia and Qatar. We also recorded a Belgian re-export. Ordinarily, Zhuhai is supplied mainly by Australia with a smaller proportion coming from Qatar. However, with a tight mark, CNOOC’s trading arm likely had to source spot cargoes further afield.
Alongside Zhuhai, Jieyang LNG also saw a substantial increase in imports during the November-December period. Full-period offtakes were up by 0.16mmt (38 percent) to 0.58mmt in November-December from 0.42mmt in September-October. Accordingly, Jieyang LNG saw capacity utilisation of 83 percent over the reporting period compared to 60 percent in September-October. The terminal has ascended to become an important indicator of Chinese LNG demand since the inauguration of China’s state-owned China Oil and Gas Pipeline Network (also known as PipeChina) last year. PipeChina links the Jieyang terminal to Guangdong Province’s existing pipeline network and further to China’s massive West-East II and III trunklines. Between its commissioning in 2017 and the launch of PipeChina, the terminal had suffered from frequent periods without shipments arriving because its send-out options were mostly limited to truck loadings.
Fujian and Beihai LNG
In line with the overall demand increase in the South China region, Fujian LNG again saw demand grow in November-December. At 0.59mmt, imports were up 0.09mmt (18 percent) from the 0.50mmt recorded during the previous period. The terminal’s capacity utilisation, therefore, stood at 56 percent. Concurrently, Beihai LNG also saw higher demand over the reporting period. Offtakes at the terminal had increased by 0.17mmt (71 percent) to 0.41mmt from 0.24mmt in September-October. The terminals’ annualised capacity utilisation stood at 82 percent for the reporting period and was on par with its year-on-year equivalent.
Hainan Island
The remaining two regional LNG terminals – Hainan LNG and the Hainan Transfer Station on Hainan Island – also saw a considerable demand increase due to higher activity at the Hainan LNG terminal. Whilst the Transfer Station saw its two-month offtake double to 0.04mmt period-on-period, Hainan LNG increased imports by 0.06mmt (22 percent) to 0.33mmt in November-December from 0.27mmt in September-October. The terminal continued to take in supplies from international sources, chiefly from Malaysia but also from Brunei, Singapore, Indonesia and Russia. Previously, supply to the terminal was limited to mostly re-exports from Beihai LNG. These re-exports stopped in August. LNG capacity utilisation on Hainan Island over the reporting period was thus 66 percent.
