LNG

China's natural gas imports as LNG cargoes and pipeline increased by more than 14 percent in the first half of 2024 compared with the same period last year, though slowed right down during the month of June.

LNG and pipeline gas imported volumes totalled 64.65 million tonnes in the January-to-June period, which was a 14.3 percent year-over-year rise from the 56.63MT logged in the same period of 2023.

Total natural gas imports for the month of June increased by only 0.3 percent to 10.42MT tonnes compared 10.39MT in June 2023.

The natural gas market in the Northern Hemisphere summer season has been marked by lower prices and higher storage levels.

Main suppliers

China’s main LNG suppliers in 2024 have been Australia, Qatar, Malaysia, Indonesia and the Yamal plant in Arctic Russia and to a lesser extent the US.

US data shows that China has dropped to the ninth preferred destination for US LNG deliveries as the focus has turned to Europe.

China's natural gas imports by pipelines as well as LNG had increased for May and during the first five months of 2024 along with domestic natural gas production.

A total of 54.28MT of natural gas was imported in the first five months of 2024, up 17.4 percent versus the previous year.

Imports of LNG to the Chinese network of 25 regasification terminals had increased in 2023 and the nation regained the No. 1 spot as the largest LNG importer ahead of Japan.

Japan’s 2023 calendar year LNG imports dropped by 8.1 percent in 2023 to 66.15MT compared with China’s overall imports of 71.35MT.

Russian pipelines

China receives varying volumes of pipeline gas through links from the former Soviet Central Asian republics as well as from Russia as part of Gazprom's “Power of Siberia” project.

The “Power of Siberia” pipeline runs for 3,000km (1,865 miles) through Siberia and into northeast China and a “Power of Siberia II” pipeline is being planned to deliver gas to China via Mongolia.

Additional pipelines inside China carry the gas for a further 2,110km through eight Chinese provinces in the north to Shanghai in eastern China.

Petronas, the Malaysian state-control energy company, has finally confirmed reports of “force majeure” being declared on natural gas supply to part of its LNG onshore export plant at Bintulu in the state of Sarawak due to a pipeline leak caused by a landslide in the vicinity of the Sabah-Sarawak Gas Pipeline last month.

The Malaysian plant has three liquefaction project divisions at Bintulu called MLNG Satu, MLNG Dua and MLNG Tiga, using the Malay words for one, two and three.

“This has impacted the supply of gas to MLNG Dua’s production facility at the Petronas LNG complex,” stated Petronas.

Petronas said it wished to clarify that the “force majeure” affects the supply of gas to MLNG Dua’s production facility only, while the other LNG production Trains  within the complex continue to operate as usual.

The Bintulu LNG plant has nine production Trains with a combined nameplate capacity of around 25 million tonnes per annum.

Mindful

“Petronas is mindful that this incident has impacted its delivery commitments to some of its contracted LNG buyers and it is in discussions to identify suitable mitigation efforts,” explained the Kuala Lumpur-based company.

The main buyers of cargoes from the three MLNG Dua liquefaction Trains are Taiwan’s CPC Corp. and Japanese utilities such as JERA Co Inc., Tokyo Gas, Osaka Gas and Tohoku Electric.

Petronas added that it was also currently conducting a comprehensive evaluation to ensure the integrity and safety of the Sabah-Sarawak pipeline.

This is the second incident in a year to hit the Bintulu LNG export plant.

In September 2021 a fire broke out but was swiftly tackled and no production was lost at the facility whose main customers are also in China and South Korea as well as Japan.

Incident

That incident occurred at the sea-cooling water outfall channel located outside the process area and the plant’s emergency response team was immediately mobilised to the scene and successfully extinguished the fire.

Petronas said at the time that five contractor personnel sustained injuries in the incident and were immediately taken to hospital and later discharged from hospital after treatment.

Malaysia's overall LNG output increased by 4.5 percent last year to 24.94 MTPA, including all projects.

Japan is the main customer receiving around 10 MTPA from Petronas, followed by Chinese firms with around 6.5 MTPA and South Koreans with 5 MTPA.

This includes volumes from three floating LNG plants deployed in Malaysian waters producing over 4 MTPA.