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China's liquefied natural gas imports hit a new record last month as inventory rises have made some importers nervous, Reuters reported, citing industry sources and ship tracking data.
The January total reached 6.55 million tonnes, up 2% from the previous record in December. However, the winter has been milder than this mbadive LNG input would be, and many importers end up with more LNG than they can sell.
"When people see these numbers, they think Chinese demand is rising … but in reality, this causes discomfort (for importers), because they have overbought and can not find the demand to absorb shipments," said a source from the energy sector. Reuters.
LNG imports increased significantly throughout 2018 by 41% as China sought to avoid a recurrence of the 2017 gas shortage, leaving several million households in northern China without heat while Government is willing to replace coal with LNG for power generation and heating. have gone beyond the development of distribution networks.
Because of this precaution, LNG traders in China now have to resell their cargo at lower prices in the domestic market or under contract with international buyers.
According to an IHS badyst Markit, domestic natural gas production is rising as well as imports, but growth in demand is expected to slow. Part of the reason is related to slowing forecasts of Chinese economic growth, said James Taverner to Reuters. Another reason is the slowing of the rate of transition from coal production to electricity production from LNG for reasons of security of supply.
China's total natural gas demand is forecast to increase by 11.4 percent in 2019 compared to 2018, a slowdown from previous years, according to badysts of China's largest oil and gas producer, China National Petroleum Corporation. (CNPC).
At the same time, the country will soon overtake Japan as the world's largest importer of LNG, despite the slowing pace of growth in demand. By 2022, China will be the country that will consume the most imported LNG.
By Irina Slav for Oilprice.com
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