Market Trends of China LNG Industry
This section covers the major market trends shaping the China LNG Market according to our research experts:
LNG regasification will dominate the market.
- China dominates the LNG regasification market globally, as the country has a high demand for natural gas due to the phasing out of coal power plants to reduce carbon emissions.
- According to the International Gas Union, in 2021, China had the third-largest regasification capacity of across regasification capacity across the globe, which is about 92.9 million metric tons.
- Further, regasification terminals are under expansion in China to meet the growing demand for natural gas. In June 2021, three storage tanks, three Intermediate Fluid Vaporizer (IFV) regasifiers, 14 loading skids, and relevant supporting facilities and process systems were added at the Zhoushan LNG regasification terminal, which increased the regasification capacity to 5 metric tons per annum.
- Similarly, in August 2021, four 160,000 m3 storage tanks were added at Caofeidian (Tangshan) LNG terminal, increasing the capacity by 3.5 metric tons per annum, taking it to 10 metric tons per annum.
- The regasification terminal is expected to grow in the forecast period due to the high demand for natural gas in China.
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LNG trade to grow in China
- After the COVID-19 pandemic, China witnessed a strong economic recovery raising the demand for natural gas for power generation. In 2021, China overtook Japan as the world's top LNG importing country and imported 79.3 metric tons of LNG.
- Further, to avoid winter 2020/2021, Chinese buyers procured LNG ahead of the winter season to comply with storage requirements and anticipate high demand.
- Moreover, to meet the nation's demand, new regasification terminals are under construction. For instance, in June 2021, the construction work started in June 2021 for the 3 MTPA Phase II at the Binhai LNG terminal and the 3.5 MTPA Phase II at the Zhuhai LNG terminal. Both are expected to be completed in 2023.
- In 2021, Chinese shipbuilders received orders for 30 new LNG tankers, an increase of 6.5 times year-on-year and accounting for a share of 32.6% of the global market.
- According to BP statistical report, In 2021, China imported 109.5 bcm of LNG, as compared to 94bcm LNG in 2020, marking a growth of 16.4%.
- Overall, the growing LNG demand in the nation encourages LNG trade and also facilitates the development of FLNG terminals, regasification terminals, and LNG sip tankers.
