China’s August LNG imports rise on pipeline outage

LNG imports into China rose by nearly 60% year on year in August after outages at two major gas pipelines disrupted supply to the domestic market in the east and northern parts of the country.

China received around 2.3m tonnes of LNG in the month, the latest customs data showed. Similar to previous months, the majority of cargoes were delivered under long-term contracts.

Only one delivery to state-owned major PetroChina’s Rudong terminal in Jiangsu was purchased on a spot basis, the data indicated. The major had likely bought a cargo from a long-term offtaker at the Sakhalin-2 LNG export project in Russia. The cargo’s price was reported to the customs at $6.42/MMBtu.

PetroChina had some spot demand then and had likely sleeved through the offtaker to win a few cargoes in a short-term tender held by Sakhalin-2 earlier this year, market sources said.

The other cargo delivered to Rudong was part of a swap agreement with state-owned counterpart Sinopec following disruption to pipeline gas supply in the second half of July (see LMD 25 July and 27 July 2016). The delivered price was reported to customs at $7.14/MMBtu.

This would be the second cargo that Sinopec delivered from the Australia Pacific LNG (APLNG) project in return for the pipeline gas that PetroChina sent during the outage. Rudong received the first APLNG cargo on a swap basis from Sinopec on 25 July, according to ICIS shipping analytics platform LNG Edge.

That cargo contributed to Australia being China’s largest LNG supplier for the eighth consecutive month this year, ICIS records showed. Australia delivered around 1.1m tonnes of LNG in August, a sharp increase from 319,989 tonnes in the corresponding period a year ago, according to the customs data.

Sinopec’s two terminals received cargoes in August, an increase in activity compared with the previous month, likely because of the pipeline outage. Its Qingdao terminal received 204,383 tonnes from its long-term offtake in Papua New Guinea in August, up by 38% from a year ago, while its Beihai terminal received 64,520 tonnes from APLNG.

Qatar delivered around 277,339 tonnes to China in August, down by a quarter from the same month in 2015, according to the customs data. Those volumes were sent to the terminals in Guangdong Dapeng and Zhuhai Gongbei. The Qatari cargo to state-owned major CNOOC’s Zhuhai Gongbei terminal was the highest-priced in August at $10.88/MMBtu, the data showed.

Imports from Indonesia rose by 26% to 315,301 tonnes in August, with only CNOOC’s 2.6mtpa Fujian Putian terminal taking volumes from Tangguh.

LNG volumes from Malaysia were at 274,990 tonnes in August, down by 15% from the same month last year.

Source: ICIS