Figures released by the General Administration of Customs in China last week reveal a rise in LNG imports to 3.3 tons in 2008, up from 2.9m tons the year prior. Despite 15% growth over the course of the year, December figures were down 23% from November.
The economic downturn, widely credited for December’s sluggish demand, suggests that 2009 import levels will not surpass those of 2008. Indeed, 2009 figures may even fall short of last year’s, due to the unique conditions that spurred LNG imports in 2008. Precautionary preparation for the Beijing Olympics was a major driver of surging LNG demand in the summer of 2008. Plagued with domestic shortages of natural gas, the Chinese shored up their stockpiles of gas and oil in the lead up to the Olympics.
How could 4,000 LNG-powered buses and cabs Beijing installed on the road and the conversion of burners in several power plants from coal-fired to gas-fired require such an influx, you ask? It did not, which is why China, having made excessive preparations for the Olympics, relaxed in October as the falling numbers suggest.
But while the summer’s din and fanfare has died down, the government’s clamor to diversify its fuel mix away from coal over the long term, in part by increasing the country’s share of gas-derived energy, has not. Infrastructure projects, which include plans to build gas and oil pipelines from Turkmenistan and Myanmar to China, might suggest China is only interested in use-ready gas. However, in it quest to achieve energy security, the Chinese are committed to continued LNG imports, as well. Evidence for this lies partially in the recent agreement between Total and China National Offshore Oil Corp. (CNOOC), under which CNOOC will purchase up to one million tons per year of LNG from Total for 15 years. A similar 20-year LNG supply agreement was signed between PetroChina and Shell in November 2008.
More importantly, 13 re-gasification terminals are currently slated for approval, said a recent Lloyd’s List news brief. These plants will join at least five facilities already online and many more currently under construction, according to Xinhua news reports and a US Department of Commerce report. Does this mean we can expect China’s reliance on coal to wither significantly? Not likely, say the experts. As the economy and Olympics demonstrate, hard work and wishful thinking alone do not secure gold medal performances.
Image credit: Energy Information Administration — DOE