Separately, Natural Gas World reported that China’s LNG imports in June were 29 % higher than a year ago, at 5.79 million tons. January to June imports of LNG were also higher. The data refutes earlier reports suggesting that China’s LNG imports in June were down 7 % on the year as the heating season ended, reducing demand.
China recently became the largest LNG importer in the world, turning into a battleground for producers amid tanking prices driven by an oversupply similar in gravity to the oversupply in crude oil markets.
In fact, prices are so low that, according to a Reuters report, at least one state energy giant is looking for long-term LNG import deals. Sinopec wants to contract 1 million tons of liquefied gas for a period of 10 years, starting in 2023, industry sources told Reuters last week.
LNG prices on the spot market are now hovering near all-time lows because of the influx of supply from new projects and the slump in demand caused by the coronavirus pandemic.
This weakened market is a buyers’ market, so the competition on price is more intense than ever. Due to geographical reasons, Russian LNG--for--now tends to be cheaper than U.S. LNG, which could explain the difference in imports into China.
Author: Irina Slav, OilPrice
