The emergence of China as an LNG super user
Jane NormanSantos Ltd, 60 Flinders Street, Adelaide, SA 5000, Australia. Email: Daniela.Ritorto@santos.com
The APPEA Journal 59(2) 667-670 https://doi.org/10.1071/AJ18249
Accepted: 5 March 2019 Published: 17 June 2019
Abstract
China has recently undergone a period of rapid industrialisation and growth. In 2009 the country became the world’s largest energy consumer, with much of this demand being historically met by coal. This heavy reliance on coal, coupled with rapid urbanisation, resulted rising smog levels and deteriorating air quality. In response to public health concerns, the Chinese government introduced several policies to transition to lower polluting fuels, with natural gas being the main beneficiary. In 2017 China’s liquefied natural gas (LNG) imports grew by an enormous 46%, to 38 Mt, as the government ordered heavy manufacturers in two provinces and 26 cities to switch from coal to gas and households to cut coal use for winter heating. Although government air quality targets were met, it resulted in severe winter gas shortages particularly in northern China. A more measured coal-to-gas switching program was undertaken in 2018 and LNG imports continued to surge reaching 54 Mt, another 41% year-on-year increase. Going forward Chinese LNG growth is expected to face competition from increased pipeline gas imports and indigenous gas production. However, there are still many risks to these forecasts, and much to play out as the market continues to be liberalised. As such, Chinese LNG demand presents an enormous opportunity for LNG suppliers both now, and well into the future.
Keywords: air pollution, energy mix, gas, imports, liquefied natural gas.
Jane Norman joined Santos in 2005 and has responsibility for the development and implementation of the Santos’ gas commercialisation strategy, commercial economic analysis and market analysis for Oil, LNG and Domestic Gas. Jane has over 20 years’ experience in the international oil and gas industry, starting her career as Process Engineer in the North Sea with Shell International Exploration and Production. Jane held various technical and commercial roles with Shell UK, based in both Aberdeen and London. She subsequently worked in various corporate finance and equity capital market roles in the City of London with Cazenove and Co (now JP Morgan Cazenove) and Goldman Sachs, where she specialised in the oil and gas sector. Jane is married and has three daughters. |
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