China's LNG imports rise to second highest on record

China's imports of liquefied natural gas (LNG) in October nearly doubled from the same month a year ago to the second highest on record, according to customs data, as companies boosted imports of the fuel ahead of the winter heating season. LNG imports rose 95.7 percent from a year earlier to 3.57 million tonnes, second only to a record 3.73 million tonnes in December, data from the General Administration of Customs showed on Thursday.
The Chinese government's aggressive campaign to heat millions of homes in the Beijing-Tianjin-Hebei region with natural gas instead of coal this winter has spurred the demand for the fuel and may cause a supply shortage. Wen Wang, a natural gas consultant with Wood Mackenzie, estimated China's LNG imports to rise 40 percent year-on-year to 20 million tonnes this winter, as companies bring in more spot cargoes on top of supplies under term contracts.
The surge in demand is luring spot cargoes from places such as Norway and Nigeria that are not traditional LNG sources for China. Shipping data on Thomson Reuters Eikon shows a 151,000-cubic-metre cargo from Nigeria is due to arrive in China early December, the third from the West African exporter this year. "The higher-than-usual demand throughout 2017 resulted in higher offtake in contracted volumes through September. This means lower contracted offtake is left for the winter, and higher demand for spot," said Wang.
The customs data showed that China's imports for the first 10 months of the year climbed 47.9 percent from the same time a year ago to 29.09 million tonnes. In the trade of refined oil products, China exported 1.21 million tonnes of diesel last month, down 10.8 percent from a year earlier and higher than September's 1.18 million tonnes. Exports of gasoline rose 11.4 percent from a year ago to 970,000 tonnes last month.
Chinese state oil refiners received in late October a total of 5 million tonnes of fuel export quotas, with diesel accounting for 60 percent of the quotas. This was an additional batch of quotas to cope with a growing fuel surplus as new refineries started.