Singapore — China's LNG import growth slowed to 2.3% over January-February, compared with around 19% seen in the same period last year, as domestic natural gas demand took a hit due to the outbreak of COVID-19, market sources told S&P Global Platts.
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Register NowChina imported 11.13 million mt of LNG in the first two months of this year, up 2.3% year on year from a revised figure of 10.88 million mt over January-February 2019, the latest data released by the General Administration of Customs showed on Wednesday.
China's natural gas demand has been greatly affected in the past two months as the government took a series of measures in a bid to constrain the spread of COVID-19, which included postponing work, restricting crowd gathering, and limiting transportation.
Factories and enterprises in many provinces have been allowed to restart work from February 10, but many of them have been operating at reduced rates because of weak demand, sources noted.
As a result of slower demand, inventories at many LNG receiving terminals were said to have been piled to high level, and some terminals were even unable to receive scheduled cargoes, according to sources. This was believed to have dampened the country's LNG imports in February.
Australia, Qatar and Malaysia remained the top three LNG suppliers to China over January-February. China's LNG imports from Australia were up 21% year on year, but the volumes from Qatar and Malaysia were down 13.4% and 25.7% year on year, respectively, the data showed.
Meanwhile, China's LNG imports from Russia registered a significant year-on-year growth of 576.9% at 872,528 mt in the first two months of this year, according to data from the customs.
PIPELINE GAS IMPORTS UP 3.6% ON YEAR OVER JAN-FEB
China imported 6.67 million mt of natural gas via pipeline over January-February, up 3.6% from a year earlier, slower from a year-on-year growth of 16.5% in the same period of last year, the customs data showed.
Market sources attributed the growth in pipeline gas this year to higher imports from Russia and Kazakhstan.
China's pipeline gas imports from Russia were 486,338 mt in the first two months of this year, up from zero in the same period of last year, while gas imports from Kazakhstan were also up by 46.5% year on year, according to the customs data.
Russia's Gazprom has begun delivery of natural gas to China via the Power of Siberia pipeline in early December, which was scheduled to send around 5 Bcm of natural gas to China in 2020, S&P Global Platts reported previously.
However, Gazprom and CNPC were reported to have agreed to temporarily shut down the Power of Siberia gas pipeline in the second half of March for a routine maintenance, and it remains unclear how long the maintenance will last.
Besides, Kazakhstan also announced it had cut natural gas supplies to China by 20%-25% in 2020.
These mean the pipeline gas imports from Russia and Kazakhstan would be affected starting from March.
On the other hand, China's imports from the biggest pipeline gas supplier Turkmenistan fell by 10.4% year on year over January-February, the data showed.
CONSUMPTION REMAINS WEAK
China imported a total 17.8 million mt of natural gas via ship and pipeline in the first two months of this year, up 2.8% year on year, slower than a year-on-year growth of 18.5% a year ago, the data showed.
Although most factories and enterprises have gradually resumed operations since late February, natural gas demand from the domestic market remained weak, market sources said.
Total natural gas demand was estimated to have resumed at 70%-80% of normal levels across China in March, market sources said.
China's gas demand was originally expected to fully recover by April as the outbreak seemed to have brought under control earlier, but the spread of coronavirus in other countries has created new uncertainties to the country's gas recovery, market sources added.