Chinese importers of liquefied natural gas (LNG) are making significant moves to establish a stronger presence on the global LNG market. In recent months, these importers have been securing new contracts with suppliers from around the world, signaling Beijing’s transition from a net importer to an international seller of the fuel.
According to a report by Reuters, Chinese gas traders have been setting up new trading desks or expanding existing ones in major LNG trading hubs such as Singapore and London. This puts them in direct competition with established LNG heavyweights like Shell, BP, TotalEnergies, and Equinor.
Traders and analysts have revealed that Chinese importers have substantially increased the scale of their long-term LNG contracts with suppliers from Qatar and the United States. Since late 2022, these contracts have risen by nearly 50% to over 40 million metric tons per year. Additionally, Chinese importers plan to add further volumes from Qatar, the United States, Oman, Canada, and Mozambique.
Consultancy firm Poten & Partners predicts that Chinese companies will have contracted LNG supplies of over 100 million tons per year by 2026. This surge in LNG imports has allowed China to surpass Japan as the largest importer of the fuel worldwide. Chinese imports have been significantly boosted by large volumes of LNG from Russian plants in the Far East and Arctic region.
Experts argue that China’s growing domestic gas production and pipeline imports from Central Asia and Russia have created a strong fuel base. This base allows Chinese gas companies to engage in trading and swapping of LNG cargoes from the United States and other suppliers.
Toby Copson, the Shanghai-based head of global trading for Trident LNG, predicts a paradigm shift for Chinese companies. He believes they will transition from being total net importers to becoming more active international and domestic trading players. State-run companies such as PetroChina, Sinopec, Sinochem Group, and CNOOC are already engaged in trading volatility to capitalize on their long portfolios.
Jason Feer, head of business intelligence at Poten & Partners, envisions China becoming a seasonal seller of LNG to Southeast Asia, South Korea, Japan, and even Europe.
These developments reflect China’s aim to establish a stronger presence in the global LNG market. By securing new contracts and expanding trading desks, Chinese importers are positioning themselves as significant players in the industry. This transition from a net importer to an international seller highlights China’s growing influence and ambition in the global energy sector.
For more stories on the economy and finance, visit RT’s business section.