While China’s estimated LNG imports dropped by 18.8 percent in 2022, the Beijing government is making plans to underwrite imported supplies of LNG, pipeline natural gas and coal during 2023 to guarantee power supplies.
China overtook Japan in 2021 to become the world’s largest LNG importer with 78.93MT of imports, though has now slipped back to see 2022 shipments totalling just 64.15 million, according to shipping data.
The shipments received at the Chinese network of 23 regasification terminals declined during the year because Covid-19 restrictions slowed up economic growth and energy demand.
Most of the imported cargoes in 2022 were handled by terminals operated by the state networks company PipeChina as well as the oil and gas majors China National Offshore Oil Corp., China Petroleum & Chemical Corp. (Sinopec) and China National Petroleum Corp.
According to energy consultancies such as UK-based Wood Mackenzie, Chinese imports are expected to rise again in 2023 to between 70MT and 72MT.
Energy bonds
China also announced a financing measure on January 6 under the 14th Five-Year Plan (2021-2025) to ensure energy supplies at state-owned power plants by providing more funding to purchase natural gas, oil and especially coal for power generation.
The State Assets Supervision and Administration Commission (SASAC) of the State Council said it would enable energy operators and power generation groups to issue 200 billion Chinese yuan ($29 billion) in special bonds to help finance and “fortify energy supply” in the country.
“These funds will be allocated to power plants in a timely manner so as to especially meet their coal needs this year,” said the state assets regulator .
“Centrally administered State-owned enterprises have generated 5 trillion kilowatt-hours of electricity since 2022, accounting for 63.1 percent of the country's total,” it added.
The SASAC said it was currently able to monitor the operations of 195 coal mines, 572 coal-powered plants, 727 hydro-electric plants and 96 gas-powered plants owned by state-owned enterprises (SOEs) across China.
“Since the end of September 2021, State Grid Corp of China and China Southern Power Grid, two central SOEs, have organized cross-regional and cross-provincial power support more than 3,000 times and transmitted nearly 50 billion kWh of electricity to places in need,” explained the SASAC .
“Ensuring sufficient coal, natural gas and oil supplies will be priorities for the government and central SOEs this year as imports of energy-related resources face various pressures such as high commodity prices,” added the statement.
Natural gas output by China’s energy majors surged over 7 percent on an annual basis to 189.99 billion cubic metres in 2022 while total stored stocks reached 17.72 Bcm, a 17.2 percent year-on-year increase.
