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China to import more gas from US

(China Daily)    10:45, May 22, 2018

Technicians check liquefied natural gas facilities in Nantong, Jiangsu province. (XU CONGJUN/FOR CHINA DAILY)

China's natural gas imports, which currently account for more than 30 percent of domestic consumption, will continue to rise and boost Sino-US energy trade while changing the global market pattern, experts said.

The nation's growing demand for natural gas, under a policy to replace polluting coal with clean natural gas to combat air pollution, is set to attract more energy majors worldwide to meet the demand, while a more diversified and flexible natural gas import channel will also help ensure national energy security, said Li Li, research director at energy consulting company ICIS China.

Record-high oil output in the US and surging demand for gas in China have been a mainstay for global energy trade, she said.

If the two countries can deepen cooperation in the fields of energy investment and trade, it will be a win-win for both sides, which play complementary roles as producers and exporters of oil and gas, she added.

Wang Lu, an Asia-Pacific oil and gas analyst at Bloomberg Intelligence, echoed similar views and said solutions to reduce the US deficit with China exist despite trade disputes.

Though it can't close the gap, increasing exports of LNG to China could reduce the US deficit with China, she said.

According to Bloomberg Intelligence, the US, which was China's fifth-largest LNG supplier and exported 1.53 million metric tons of LNG to the country last year, may increase LNG exports to China, which should marginally reduce the trade deficit.

The country's energy companies are all rushing to meet the demand driven by China's rapidly growing thirst for natural gas. PetroChina signed a 25-year purchase contract with Houston, Texas-based Cheniere Energy in February for 1.2 tons per annum of LNG. Private companies including Guanghui Energy and ENN Group have joined State-owned CNOOC, PetroChina and Sinopec in the LNG receiving terminals business, increasing channels for spot LNG imports.

Bloomberg Intelligence figures show last year's LNG trade with the US was worth about $644 million, less than 0.2 percent of the trade gap of $375 billion. While US Commerce Secretary Wilbur Ross encourages China to import more LNG to reduce the deficit, the contribution would be marginal.

In addition to the clean fuel, Wang estimated that China may buy more US oil, extending last year's trend and marginally reducing the trade deficit.

Figures of Bloomberg Intelligence show US crude-oil exports to China totaled $4.4 billion in 2017, calculated by multiplying monthly average WIT prices and traded barrels. That's 1.2 percent of last year's $375 billion trade deficit.

The US Energy Information Administration lifted the 2018 average US crude oil production forecast to a record 10.7 million barrels a day. The record-high oil production may lead to more crude oil exports this year, she said.

(For the latest China news, Please follow People's Daily on Twitter and Facebook)
(Web editor: Xu JiaWei, Bianji)

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