The outlook is weak for LNG demand into Guangdong province, China’s economic and export powerhouse and the number one gas consumption centre, according to ICIS LNG Edge data and analyst forecasts.
Moderate air cooling demand, weak manufacturing output, and high gas costs for gas-fired power plants are limiting potential gas consumption growth in Guangdong over the summer.
ICIS reduced China’s overall July to September LNG demand by 10% to 15.5m tonnes in the latest forecast, compared to the June evaluation.
To date, the province has six operating LNG receiving terminals with a total nameplate capacity of 16.6mtpa.
Spot LNG imports have fallen sharply in the first half of 2022, with 26 fewer cargoes into the region when compared to the same period last year, ICIS LNG Edge data shows.
Demand for long-term supplied cargoes was also down year on year, by between six to eight cargoes, from January to June 2022.
“This change is within our expectations, as most of our terminal use agreement clients shift their gas purchasing plans from LNG to domestic pipeline gas,” said a major LNG terminal manager.
The reduction is one way the global LNG market may come to balance in 2022 given such high European demand.
ALTERNATIVE OPTION FOR CITY GAS
China’s leading natural gas provider CNPC has welcomed record-high Russian gas flows via the Power of Siberia pipeline.
In the first half of 2022, Gazprom increased the supply to China by 63% under the 30-year contract with CNPC, according to Gazprom’s release on 1 July.
