China's liquefied natural gas imports could hit record levels in 2024, a PetroChina official forecast on Wednesday.
China is the world's largest LNG buyer, while PetroChina is the largest natural gas importer in China.
Zhang Yaoyu, global head of LNG and new energies for PetroChina International, said at an industry conference in Bangkok that his company is seen shipping between 78-80 million metric tons of LNG this year, with the industrial and commercial sectors driving demand.
Zhang's forecast would be a 9-12% rise from the 71.2 million metric tons imported in 2023, according to China's customs data.
China imported a record 78.8 million metric tons in 2021.
“Based on the first quarter data, that's achievable,” said Zhang.
He said China has shipped nearly 20 million tons of LNG already in the first quarter of this year, with the chemicals, paper, steel and cement industries driving demand growth.
“Besides, we haven't seen winter (demand) yet.”
For power plants in China, however, LNG prices would need to drop to below $6 per million British thermal units (mmBtu) for consumption to pick up, added Zhang, who spoke to Reuters on the sidelines of the Future Energy Asia conference.
Asia spot LNG prices had traded as low as around $8/mmBtu in February this year, its lowest in nearly three years, amid weak demand in Asia and Europe. But hotter weather and supply concerns have since pushed prices up to $10.50/mmBtu.
Zhang said he expects coal to support grid stability in China and did not see greater LNG adoption in power generation amid rising renewable energy use.
“You can't solely rely on renewable power. The reliability, that's not going to be easy. But having said that, the base is still coal. So (in the) short term, no worries.”
On Wednesday, a coal industry association said a sharp increase in China's hydropower generation from late April is likely to continue, leading to lower-than-expected demand for coal in power plants.
Hydropower output in the last third of the month was up 42.9% year on year and is “very likely to maintain double-digit growth,” China Coal Transportation and Distribution Association analyst Feng Huamin told a market seminar, adding that drought-stricken Yunnan province in the south has had more rain recently.
“Following the beginning of the flood season, hydropower's squeeze on thermal power generation will gradually become more obvious,” Feng said, adding that the continued ramp-up in renewable capacity will also eat into coal's share of power generation.
