Key facts
- China's June liquefied natural gas (LNG) imports are forecast to reach 5.29 million tons, unchanged from the previous year.
- This volume is an increase from May's 4.9 million tons, driven by rising summer power demand.
- China's LNG inventories were at 46% capacity at the end of May, below the five-year average.
- Weakened domestic production is contributing to higher import demand.
- China is preparing a new LNG import terminal to receive cargoes from Russia's Arctic LNG 2 project, expected to be ready by October.
China's liquefied natural gas (LNG) imports are expected to remain steady year-on-year in June, with Kpler forecasting arrivals of 5.29 million tons. This figure represents an increase from May's 4.9 million tons, as demand intensifies due to the summer surge in air-conditioning usage.
The May import level marked a reversal from earlier months, which saw declines attributed to crimped supply from the Middle East, leading to higher prices and increased reliance on coal for power generation. April LNG imports were the lowest since 2018.
Kpler anticipates robust demand for LNG in the third quarter as China's inventories deplete, with inventories at 46% capacity by the end of May, below the five-year average. Weakened domestic production further bolsters the need for imports.
Despite its significant investments in solar and wind energy, China maintains a reliance on coal and pipeline gas, which is cheaper than LNG. However, the country is diversifying its energy sources and is preparing a new LNG import terminal to receive cargoes from Russian Novatek's Arctic LNG 2 project. This terminal is slated to be operational by October, ahead of winter demand.
China has indicated it will not comply with EU sanctions on the Russian project.