Australia\u2019s fast-expanding liquefied natural gas industry has this year been supplying the lion\u2019s share of China\u2019s growing demand for imports of the commodity, with appetite surging as Beijing shifts away from dirtier fuels such as coal.<\/p>\n\n\n\n
Australia supplied over 53% of China\u2019s LNG imports during the first five months of 2019, shipping data in Refinitiv showed, up from around 40% in 2016 when a previous round of new Australian export projects started to ramp up.<\/p>\n\n\n\n
With Royal Dutch Shell\u2019s Prelude facility delivering its first LNG cargo this week from northwest Australia, that share is likely to increase further.<\/p>\n\n\n\n
Prelude\u2019s start-up completes a $200 billion LNG construction boom that is putting Australia on track to surpass Qatar as the world\u2019s top exporter of the fuel.<\/p>\n\n\n\n
\u201cWith uncertainty of demand in more traditional LNG markets \u2026 China has emerged as the largest source of new LNG demand growth, and hence a focus for LNG marketing efforts for the next wave of Australian LNG volumes,\u201d said Saul Kavonic, an analyst with Credit Suisse.<\/p>\n\n\n\n
The export surge means Australia is well ahead of China\u2019s traditional main suppliers of gas such as Malaysia, Qatar and Indonesia, as well as newer exporter the United States.<\/p>\n\n\n\n
The United States, which only started LNG exports in 2016, initially saw increases to China, supplying a peak of around 10% of its overall imports last year. But shipments have all but ceased after Beijing enacted a 25% tariff on U.S. supply as part of a tit-for-tat trade dispute with Washington.<\/p>\n\n\n\n
\u201cThe China-U.S. trade dispute has had an impact on LNG markets. The tariffs make U.S. LNG much less cost-competitive for Chinese buyers, so they have to consider other options,\u201d said James Taverner of consultancy IHS Markit.<\/p>\n\n\n\n
With production surging across the world, the Asian LNG market has become oversupplied just as demand stutters from traditional buyers like Japan, resulting in a 60% plunge in prices since last year to near record lows of just over $4 per million British thermal units.<\/p>\n\n\n\n
China\u2019s natural gas consumption has surged amid a gasification program that is shifting millions of households and a large number of factories to natural gas from coal. Global LNG producers are keen to meet that demand.<\/p>\n\n\n\n
However, some analysts warn that headwinds in China\u2019s economy could take the edge off demand for LNG.<\/p>\n\n\n\n
\u201cCoal-to-gas mandates have moderated in line with affordability \u2026 and weakening economic growth will weigh on demand,\u201d Taverner said, adding that growth in LNG imports could ease over the next few years.<\/p>\n\n\n\n
China also appears to be diversifying gas supply, potentially importing more from sources such as Russia and Mozambique, the Oxford Institute for Energy Studies said in a paper released this month.<\/p>\n\n\n\n
\u201cThe \u2018Power of Siberia\u2019 line commissions at the end of this year and Russia will become China\u2019s most important new supplier in recent years,\u201d the firm said.<\/p>\n\n\n\n
\u201cChina may also look more favorably on additional pipeline deals with Russia given its resource base and its desire to reach agreement on further gas projects.\u201d
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Australia\u2019s fast-expanding liquefied natural gas industry has this year been supplying the lion\u2019s share of China\u2019s growing demand for imports of the commodity, with appetite surging as Beijing shifts away from dirtier fuels such as coal. Australia supplied over 53% of China\u2019s LNG imports during the first five months of 2019, shipping data in Refinitiv …<\/p>\n","protected":false},"author":1,"featured_media":2158,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[64,20],"tags":[101,95,43,84],"class_list":["post-2157","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-maritime-news","category-news","tag-australias","tag-china","tag-gas","tag-lng-slump"],"_links":{"self":[{"href":"https:\/\/www.al-sindbad.net\/rest\/wp\/v2\/posts\/2157","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.al-sindbad.net\/rest\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.al-sindbad.net\/rest\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.al-sindbad.net\/rest\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.al-sindbad.net\/rest\/wp\/v2\/comments?post=2157"}],"version-history":[{"count":0,"href":"https:\/\/www.al-sindbad.net\/rest\/wp\/v2\/posts\/2157\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.al-sindbad.net\/rest\/wp\/v2\/media\/2158"}],"wp:attachment":[{"href":"https:\/\/www.al-sindbad.net\/rest\/wp\/v2\/media?parent=2157"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.al-sindbad.net\/rest\/wp\/v2\/categories?post=2157"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.al-sindbad.net\/rest\/wp\/v2\/tags?post=2157"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}