China’s total natural gas imports, both pipeline and liquefied natural gas (LNG), last year reached some 101.66 million tonnes, a 5.3 percent year-on-year increase, according to customs data. In December, its total gas imports soared to 11.23 million tonnes, a new record, with LNG imports representing over 9 million tonnes for the month – also a record high. It was the second month in a row that China’s LNG imports bypassed current LNG global leader Japan. China’s increased natural gas demand came as the country largely shrugged off economic headwinds from the COVID-19 pandemic by April due to early lockdowns around Wuhan, the epicenter of the virus. Last year, China was the only G20 member that posted positive economic growth at just over 2 percent and is forecasted to grow 7.9 percent this year.
China is also repositioning itself as an LNG powerhouse that could soon rival Japan by not only increasing procurement of the fuel, both spot and long-term off-take agreements, but by a massive LNG and gas infrastructure build-out. China had 22 LNG import terminals with a total annual receiving capacity of 81 million cubic meters (mcm). The country also plans to set up two new terminals – Pinghu LNG and Wenzhou LNG this year, and launch as many as five terminal expansions, adding 17 mcm of receiving capacity. China also pushed through with a long-fought liberalization of gas markets by approving group LNG purchases, which allows smaller players, particularly city gas distributors, more procurement options, in addition to incentivizing both private and smaller state-run companies to set up their own terminals. Smaller terminals could make up as much as 40 percent of China’s LNG capacity by 2030, compared to just 15 percent currently. China is projected to bypass Japan as the world’s top LNG importer by as early as 2022 or 2023.