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Saudi Arabia Boosts Int’l Economy Protection, Supports Strategic Partnerships

Minister of Economy and Planning Faisal Bin Fadel Al-Ibrahim, Asharq Al-Awsat
Minister of Economy and Planning Faisal Bin Fadel Al-Ibrahim, Asharq Al-Awsat
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Saudi Arabia Boosts Int’l Economy Protection, Supports Strategic Partnerships

Minister of Economy and Planning Faisal Bin Fadel Al-Ibrahim, Asharq Al-Awsat
Minister of Economy and Planning Faisal Bin Fadel Al-Ibrahim, Asharq Al-Awsat

Saudi Arabia’s Minister of Economy and Planning Faisal al-Ibrahim affirmed on Saturday that the Kingdom is one of the world’s most important economic powers and is actively contributing to sustainable growth and protecting the global economy.

The Kingdom’s role, according to al-Ibrahim, is aiding humanity in confronting climate change and empowering people to shape promising futures.

“The Kingdom continues its pioneering role in expanding international cooperation and supporting strategic partnerships in a way that increases communication and activates the exchange of ideas and experiences because of its importance in drawing up policies that aim to develop effective solutions to the challenges facing the world,” said al-Ibrahim.

“These have a direct impact on achieving the Kingdom’s goals represented in Vision 2030 and enhancing its competitive capabilities,” he added in a statement on the occasion of the Kingdom’s participation in the G20 Leaders’ Summit in Italy.

Also, al-Ibrahim addressed the Economy and Planning Ministry’s role in the work of the Development Working Group under the Italian Presidency.

He pointed out that the ministry had participated in negotiations and conducted dialogue sessions as a member of the Troika and completed work on the recommendations and initiatives emanating from the Kingdom’s presidency in 2020.

The outputs of the Development Working Group focused on the potential of innovative financing instruments such as blended finance mechanisms, investment guarantees, sustainable development goals, green bonds, and support for the implementation of integrated national finance frameworks (INFFs).

Al-Ibrahim noted that the Group’s work highlighted the importance of the financial track to drive sustainable development financing, based on what was presented under the presidency of the Kingdom and previous presidencies.

The minister indicated that this year, the Group discussed communication between urban and rural areas and the role of intermediate cities as key actors for sustainable development and the localization of sustainable development goals.

The minister added that the Group worked to assess the roles of these actors in responding to the pandemic.

Additionally, the Group addressed present weaknesses to ensure a more sustainable and inclusive recovery.

Al-Ibrahim also noted that the Group paid attention to the role of cities, strengthening rural-urban linkages, and enabling rural families to diversify their sources of income.

It is noteworthy that the minister participated in a joint ministerial meeting of foreign and development ministers within the Italian presidency of G20.

The meeting focused on sustainable development goals, strengthening efforts to achieve global food security, obtaining the necessary political support to take concrete measures to confront the food crises arising from the coronavirus pandemic, and the measures that the Group will take to support trade and investment in the world.

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Business

Red Sea Int’l Airport in Saudi Launches 8 Weekly Flights

Group CEO of Red Sea Global John Pagano. (Asharq Al-Awsat)
Group CEO of Red Sea Global John Pagano. (Asharq Al-Awsat)
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Red Sea Int’l Airport in Saudi Launches 8 Weekly Flights

Group CEO of Red Sea Global John Pagano. (Asharq Al-Awsat)
Group CEO of Red Sea Global John Pagano. (Asharq Al-Awsat)

The Red Sea International Airport in Saudi Arabia’s western region, which opened last year, is now buzzing with eight weekly flights connecting Riyadh, Jeddah, and Dubai.

The airport is a key part of Saudi Arabia’s national transformation plan, “Vision 2030,” led by Prince Mohammed bin Salman, Crown Prince and Prime Minister.

It is meant to serve projects in the region developed by Red Sea Global (RSG).

RSG is one of the world’s most visionary developers, wholly owned by the Public Investment Fund (PIF) of Saudi Arabia.

The company is spearheading a new model of development, putting people and planet first and leveraging the most innovative concepts and technologies to deliver projects that actively enhance the well-being of customers, communities and environments.

Its portfolio includes two world-leading destinations announced by Crown Prince Mohammad, The Red Sea and Amaala.

Collectively, these responsible and regenerative tourism destinations will aim to enhance Saudi Arabia’s luxury tourism and sustainability offering, going above and beyond to not only protect the natural environment, but to enhance it for future generations to come.

A cornerstone of Vision 2030, RSG will help transform the nation, creating significant economic opportunities for the people of Saudi Arabia and actively enhancing the Kingdom’s rich environmental and cultural heritage.

By 2030, the airport is expected to serve a million passengers annually, with a peak capacity of 900 passengers per hour for both domestic and international flights.

Domestic flights started in September 2023, followed by international flights from Dubai International Airport on April 18, 2024.

John Pagano, Group CEO of RSG, disclosed to Asharq Al-Awsat at the sidelines of the “GREAT FUTURES” conference in Riyadh that the company has already opened three tourist resorts.

He revealed plans for two more resorts to open later this year.

Pagano explained that RSG has made significant investments and struck diverse deals.

According to the group CEO, around 17 billion riyals ($4.5 billion) in funding and partnerships for infrastructure projects worth 20 billion riyals ($5.3 billion) have been secured.

Business

Saudi PIF Leads Integrated Effort to Build National Car Sector

Saudi PIF launched Saudi Arabia’s first electric car brand, “CEER,” in November 2022. (PIF)
Saudi PIF launched Saudi Arabia’s first electric car brand, “CEER,” in November 2022. (PIF)
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Saudi PIF Leads Integrated Effort to Build National Car Sector

Saudi PIF launched Saudi Arabia’s first electric car brand, “CEER,” in November 2022. (PIF)
Saudi PIF launched Saudi Arabia’s first electric car brand, “CEER,” in November 2022. (PIF)

Saudi Arabia’s Public Investment Fund (PIF) is making big moves to kickstart the Kingdom’s own car industry.

It launched Saudi Arabia’s first electric car brand, “CEER,” in November 2022 and is backing the National Automotive and Mobility Academy (NAFAM) while investing heavily in the car and mobility sector.

In one of its reports, PIF emphasized how this sector can create jobs, boost the economy beyond oil, and fill skill gaps regionally. The fund also aims to create opportunities for private businesses and push forward research and development.

Following Saudi Arabia’s national transformation plan, Vision 2030, the Kingdom’s investments are driving economic growth and diversification.

PIF’s investment in the US electric vehicle company, Lucid, is a prime example. Lucid opened its first electric car factory in Saudi Arabia in September 2023, coinciding with CEER’s launch.

CEER recently announced a major deal worth about $1.3 billion for a new industrial complex.

According to CEER CEO Jim DeLuca the complex will set new industry standards both locally and globally. It will feature top-notch technologies, equipment, and staff, backed by partnerships with leading industry players like Durr, Schuler, and Siemens.

Mohammed Al-Shiha, who heads the Automotive and Mobility Sector at the Middle East and North Africa division of the fund, underscores their focus on future-ready tech. For cars, this means prioritizing electric and hydrogen vehicles for a greener future.

He noted that Saudi Arabia has laid a strong foundation for its car industry and is now shifting towards building its own suppliers. Examples include partnering with global giant Pirelli for top-notch tires and teaming up with Hyundai Motor to set up an advanced car plant.

Alongside global brands, the fund is launching a joint venture with the Saudi Electricity Company to establish “Electric Vehicle Infrastructure Company.” Their aim is to provide fast charging services across the Kingdom by 2030.

Business

Saudi Arabia Launches Training Program to Combat Money Laundering, Terrorism Financing

Director-General of Saudi Arabia’s Financial Academy Mana bin Mohammed Al-Khamsan. (Asharq Al-Awsat)
Director-General of Saudi Arabia’s Financial Academy Mana bin Mohammed Al-Khamsan. (Asharq Al-Awsat)
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Saudi Arabia Launches Training Program to Combat Money Laundering, Terrorism Financing

Director-General of Saudi Arabia’s Financial Academy Mana bin Mohammed Al-Khamsan. (Asharq Al-Awsat)
Director-General of Saudi Arabia’s Financial Academy Mana bin Mohammed Al-Khamsan. (Asharq Al-Awsat)

Saudi Arabia has unveiled a new training program to fight money laundering and terrorism financing. The initiative targets leaders in financial and non-financial sectors across the country.

The announcement was made during the "Arab Forum for Anti-Corruption Agencies and Financial Intelligence Units," a two-day event sponsored by Prince Mohammed bin Salman, Crown Prince and Prime Minister of Saudi Arabia, in Riyadh.

The 18-month program aims to train personnel to better prevent, analyze, and report illegal activities. It also seeks to improve information sharing between financial institutions and regulatory bodies, bolstering the overall integrity of the financial system.

The program, presented by Mana bin Mohammed Al-Khamsan, Director-General of Saudi Arabia’s Financial Academy, is a joint effort with the Kingdom’s state security and an international consultancy.

Al-Khamsan stressed the importance of combating financial crimes and highlighted the academy’s commitment to providing specialized training and certifications.

Aligned with Saudi Arabia’s national transformation plan, Vision 2030, the academy aims to support entities combating corruption and financial crimes. It has conducted over 500 training programs benefiting thousands of professionals from various sectors.

Al-Khamsan emphasized the value of professional certifications in boosting workforce efficiency, noting partnerships with respected international associations and institutions.

Business

Saudi Arabia Tops G20 Countries in Financial Regulation Compliance

The Arab Forum for Anti-Corruption Agencies and Financial Intelligence Units was held over two days in Riyadh. (X)
The Arab Forum for Anti-Corruption Agencies and Financial Intelligence Units was held over two days in Riyadh. (X)
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Saudi Arabia Tops G20 Countries in Financial Regulation Compliance

The Arab Forum for Anti-Corruption Agencies and Financial Intelligence Units was held over two days in Riyadh. (X)
The Arab Forum for Anti-Corruption Agencies and Financial Intelligence Units was held over two days in Riyadh. (X)

Saudi Central Bank Governor Ayman Al-Sayari announced that Saudi Arabia has the highest compliance in supervision and regulation among G20 countries. He warned that financial crimes are costly for countries, harming their financial stability and investment levels.

Al-Sayari spoke at the “Arab Forum for Anti-Corruption Agencies and Financial Intelligence Units,” a two-day event sponsored by Prince Mohammed bin Salman, Crown Prince and Prime Minister of Saudi Arabia and held in Riyadh.

The forum aimed to strengthen cooperation and build capacity among agencies fighting financial crimes, money laundering, and terrorism financing in the Middle East and North Africa.

Al-Sayari highlighted that Saudi Arabia’s compliance with international anti-corruption and organized crime standards has strengthened the Kingdom’s financial system and increased trust.

He pointed out the effective measures taken against financial crimes and corruption, including preventive steps.

The Saudi Central Bank uses a comprehensive approach to balance growth with acceptable risk levels, ensuring financial stability and integrity, asserted the governor.

Al-Sayari stressed the importance of working closely with regulatory bodies and authorities, especially in combating financial crimes and corruption.

He also noted that Saudi Arabia’s financial regulators provide specialized training to employees, equipping them with the technological tools needed to detect crimes.

At the end of its sessions on Thursday, the forum issued recommendations for Arab countries to adopt a model agreement to boost local cooperation between anti-corruption agencies and financial intelligence units.

The forum suggested Arab countries promote this model agreement in international forums to showcase their efforts in fighting money laundering, terrorism financing, and related crimes, especially corruption.

The recommendations also called for stronger local and international cooperation to combat money laundering, terrorism financing, and corruption.

This includes effectively implementing the UN Convention against Corruption and other relevant agreements.

The forum emphasized working with the private sector and building partnerships to protect societies from these crimes. It also highlighted the need for capacity building and knowledge enhancement through specialized courses, workshops, and the exchange of expertise.

Business

IMF Expects Iraq’s Economy to Grow by 1.4% in 2024, 5.3% in 2025

The International Monetary Fund (IMF) said on Thursday that Iraq’s economy contracted by 2.2% in 2022, projecting a growth by 1.4% in 2024 and 5.3% in 2025. (AFP)
The International Monetary Fund (IMF) said on Thursday that Iraq’s economy contracted by 2.2% in 2022, projecting a growth by 1.4% in 2024 and 5.3% in 2025. (AFP)
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IMF Expects Iraq’s Economy to Grow by 1.4% in 2024, 5.3% in 2025

The International Monetary Fund (IMF) said on Thursday that Iraq’s economy contracted by 2.2% in 2022, projecting a growth by 1.4% in 2024 and 5.3% in 2025. (AFP)
The International Monetary Fund (IMF) said on Thursday that Iraq’s economy contracted by 2.2% in 2022, projecting a growth by 1.4% in 2024 and 5.3% in 2025. (AFP)

The International Monetary Fund (IMF) said on Thursday that Iraq’s economy contracted by 2.2% in 2022, projecting a growth by 1.4% in 2024 and 5.3% in 2025.

The international monetary organization expected fiscal deficit to widen to 7.6% of GDP in 2024 from 1.3% in 2023, noting that Iraq requires an ambitious fiscal adjustment to stabilize debt in the medium term and rebuild buffers.

The findings came in the context of the 2024 Article IV consultation with Iraq. The IMF released documents showing that domestic stability in the country has improved since the new government took office in October 2022, facilitating the passage of Iraq’s first three-year budget, which entailed a large fiscal expansion starting in 2023.

This supported the strong recovery in Iraq’s non-oil economy after a contraction in 2022, while the country was largely unaffected by the ongoing conflict in the region.

“Domestic inflation declined to 4% by end-2023, reflecting lower international food prices, the currency revaluation as of February 2023, and the normalization in trade finance. However, imbalances have worsened due to the large fiscal expansion and lower oil prices,” the IMF said in a statement.

Moreover, it said the ongoing fiscal expansion is expected to boost growth in 2024, at the expense of a further deterioration of fiscal and external accounts and Iraq’s vulnerability to oil price fluctuations.

“Without policy adjustment, the risk of medium-term sovereign debt stress is high and external stability risks could emerge. Key downside risks include much lower oil prices or a spread of the conflict in Gaza and Israel,” the IMF added.

In Iraq, real GDP growth would reach 1.4% in 2024 and accelerate to 5.3% in 2025, the IMF said, also projecting deficit to widen from 1.3% in 2023 to 7.6% of GDP in 2024.

It noted that Iraq’s public debt-to-GDP ratio is expected to reach 48.2% in 2024 and 54.6% in 2025.

IMF directors emphasized that a gradual, yet sizeable fiscal adjustment is needed to stabilize debt in the medium term and rebuild fiscal buffers.

They encouraged the authorities to focus on controlling the public wage bill, phasing out mandatory hiring policies, and mobilizing non-oil revenues, while better targeting social assistance.

The Directors agreed that prompt implementation of customs and revenue administration reforms, a full implementation of the Treasury Single Account, and a strict control and limit of the use of extrabudgetary funds and government guarantees are key to support fiscal consolidation.

Limiting monetary financing and reforming the pension system are also important, they stressed.

They commended the central bank’s efforts to tighten monetary policy and enhance its liquidity management framework. Improving coordination between fiscal and monetary operations would help absorb excess liquidity and bolster monetary policy transmission.

They concurred that accelerating the restructuring of the large state-owned banks is also essential.

They also encouraged further modernizing the private banking sector, including by facilitating the establishment of correspondent banking relationships, reducing regulatory uncertainties, and promoting efficiency and competitiveness of private banks.

Furthermore, they emphasized the need for structural reforms to unlock private sector development. They encouraged leveling the playing field between public and private jobs, boosting female labor force participation, and reforming education and labor laws.

The directors agreed that improving governance and combatting corruption are also key, in addition to bolstering public procurement and business regulations, and addressing electricity sector inefficiencies.

They welcomed the renewed efforts toward the World Trade Organization (WTO) accession and encouraged the authorities to improve the coverage and timeliness of statistics.

Business

Saudi Arabia, Slovenia Discuss Economic Cooperation

The Saudi Minister of Economy and Planning has met with Slovenian Deputy Prime Minister and Minister of Foreign and European Affairs. SPA
The Saudi Minister of Economy and Planning has met with Slovenian Deputy Prime Minister and Minister of Foreign and European Affairs. SPA
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Saudi Arabia, Slovenia Discuss Economic Cooperation

The Saudi Minister of Economy and Planning has met with Slovenian Deputy Prime Minister and Minister of Foreign and European Affairs. SPA
The Saudi Minister of Economy and Planning has met with Slovenian Deputy Prime Minister and Minister of Foreign and European Affairs. SPA

Saudi Minister of Economy and Planning Faisal Alibrahim has met with Slovenian Deputy Prime Minister and Minister of Foreign and European Affairs Tanja Fajon.

The two officials discussed their countries' ties, topics of mutual interest, and opportunities to strengthen cooperation.

Business

UAE’s ADNOC to Begin Production at Ras Al Sadr Gas Field

The field has production capacity of up to 100 million standard cubic feet of gas per day. WAM
The field has production capacity of up to 100 million standard cubic feet of gas per day. WAM
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UAE’s ADNOC to Begin Production at Ras Al Sadr Gas Field

The field has production capacity of up to 100 million standard cubic feet of gas per day. WAM
The field has production capacity of up to 100 million standard cubic feet of gas per day. WAM

The United Arab Emirates' state-owned energy giant ADNOC is to start production at the Ras Al Sadr gas field in Abu Dhabi, state news agency WAM reported on Thursday.

The field has production capacity of up to 100 million standard cubic feet of gas per day, WAM said.

Ras Al Sadr is being developed jointly by ADNOC and JODCO, a subsidiary of one of Japan’s largest oil and gas exploration and production companies, INPEX.

“The successful restart of operations in the Ras Al Sadr field highlights ADNOC’s commitment to setting new industry standards as we strive to responsibly meet the demands of an ever-changing energy market,” said ADNOC Upstream Executive Director Abdulmunim Saif Al Kindy.

“The first well at Ras Al Sadr was the start of Abu Dhabi’s oil industry that has powered the UAE’s economy for over half a century. This achievement underscores our contribution to the prosperity and sustainability of the country and reaffirms our commitment to operate in harmony with local communities to create lasting and sustainable value for the nation,” he added.

Business

British Deputy PM Says UK to Cooperate with Saudi Arabia on Green Hydrogen, Renewable Energy

British Deputy Prime Minister Mr. Oliver Dowden speaks to Asharq Al-Awsat
British Deputy Prime Minister Mr. Oliver Dowden speaks to Asharq Al-Awsat
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British Deputy PM Says UK to Cooperate with Saudi Arabia on Green Hydrogen, Renewable Energy

British Deputy Prime Minister Mr. Oliver Dowden speaks to Asharq Al-Awsat
British Deputy Prime Minister Mr. Oliver Dowden speaks to Asharq Al-Awsat

British Deputy Prime Minister Mr. Oliver Dowden has said that the UK has agreed with Saudi Arabia to strengthen cooperation in areas such as green and clean hydrogen and carbon capture, utilization and storage (CCUS).

“We are keen to make more efforts together in research and innovation in renewable energy,” Dowden told Asharq Al-Awsat newspaper in an interview.

“Saudi Arabia is a testbed for so much of the innovation that will transform all of our lives, from clean energy to healthy lifestyles,” he said.

Here is the full text of the interview:

Q: What are you hoping to achieve from the GREAT FUTURES event in Riyadh and why is it important?

One of the most extraordinary stories in our world at the moment is the social, economic and cultural transformation of Saudi Arabia. Your country is now home to some of the world's largest initiatives, including five major giga projects, investing more than three trillion by 2030, all encapsulated by your country’s ‘Vision 2030.’

Britain wants to not only endorse ‘Saudi Vision 2030’, we want to be part of it.

That’s why I’m leading a 400+ strong business delegation, the biggest ever UK business delegation to Saudi Arabia. I’ll be joined by captains of UK industry from financial services, business and culture. We are coming to promote cooperation between our Kingdoms and secure joint investment across critical sectors from financial services, business, education, and culture.

Alongside His Excellency Minister Al Qasabi, I co-chair the UK-Saudi ‘Strategic Partnership Council’ established in 2018 to underpin relations between our kingdoms - and through this partnership we have already achieved much and there is more to come.

The two day GREAT FUTURES summit will serve as a forum to continue discussions about further investment in many sectors, including critical minerals and cutting edge technology, as well as the planned free trade agreement between the United Kingdom and the Gulf Cooperation Council.

This year-long campaign is no longer just a vision, but rather a plan of action that the UK is proud to be a key partner in supporting.

It demonstrates the UK’s commitment to support Saudi Arabia’s transformation and also acts as a mechanism to turbocharge British businesses presence in the Kingdom and accelerate vital business to business links that make our relationship so valuable. Britain is the perfect partner to help achieve its huge ambitions.

Q: What will you be announcing at GREAT FUTURES?
New figures show that Saudi inward investment into the UK from Saudi Arabia has topped £16.8 billion since 2017.
The North East of England alone stands to benefit from a further £3 billion of planned investment from Saudi Arabia, sustaining 2,000 jobs in the region.
On top of these new figures, I will be announcing a constellation of new investment between our two Kingdoms - in sectors including financial services, education, culture and more.

Specifically the United Kingdom will sign an updated Memorandum of Understanding (agreement) with the kingdom of Saudi Arabia renewing a joint commitment to further investment.

British universities as a university as The University of Strathclyde plans to cooperate with its counterpart Saudi universities. The new partnership represents a wave of institutions expanding into the region, with 40 higher educational partnerships signed between the two Kingdoms to date.

We agreed to strengthen cooperation in areas such as green and clean hydrogen and carbon capture, utilization and storage (CCUS). We are keen to make more efforts together in research and innovation in renewable energy. Saudi Arabia is a testbed for so much of the innovation that will transform all of our lives, from clean energy to healthy lifestyles.

Q: Why is it easy to do business in Saudi Arabia?
We have strong trade links and established business practices. Saudi Arabia is the 20th largest UK export market with £11.7 billion total exports for the four quarters to the end of Q2 2023.

This partnership is really a two-way street. We’re opening up our markets to one another, so that investment, exports, tourism and collaboration flows in both directions

Q: What will you be doing in AlUla?

As former Culture Secretary, one of the most exciting areas of collaboration is the cultural exchange and I am eager to see the magnificence of AlUla, which I’ve heard so much about.

I will be visiting the beautiful and internationally significant city to make the expected announcement of further cultural partnerships between our two Kingdoms.

Q: Doing business in the UK is now harder than ever because of the UK’s regulatory system, is that something you can tell us about?

It is important to stress that the UK’s National Security & Investment Act will always enthusiastically champion open markets, recognizing the vast majority of inward investment is highly beneficial. But alongside our openness to investment, the government also needs to undertake appropriate due diligence in sensitive sectors, to manage our national security interests.

The National Security and Investment Act gives us the tools to do this. Our aim is to enable investments wherever we can, sometimes with appropriate protections in place.

Q: What does the UK-Saudi relationship mean for stability in the region?

The UK and Saudi Arabia have a deep historical relationship, based on a long history of working together diplomatically, a close military and security relationship, and strong economic and commercial links. This relationship is important in maintaining and developing how we work together to tackle regional threats, and ensure greater stability for the region.

Business

Abu Dhabi's Lunate Launches ETF Tracking Japan Equities

Lunate Capital is launching an exchange-traded fund tracking Japanese equities that will be listed on the Abu Dhabi securities exchange (ADX). WAM
Lunate Capital is launching an exchange-traded fund tracking Japanese equities that will be listed on the Abu Dhabi securities exchange (ADX). WAM
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Abu Dhabi's Lunate Launches ETF Tracking Japan Equities

Lunate Capital is launching an exchange-traded fund tracking Japanese equities that will be listed on the Abu Dhabi securities exchange (ADX). WAM
Lunate Capital is launching an exchange-traded fund tracking Japanese equities that will be listed on the Abu Dhabi securities exchange (ADX). WAM

Abu Dhabi investor Lunate Capital is launching an exchange-traded fund (ETF) tracking Japanese equities that will be listed on the Abu Dhabi securities exchange (ADX), the firm said in a statement on Thursday.

Lunate said the Chimera S&P Japan UCITS ETF, its third ETF so far this year, will list on May 29 and give investors access to the top 30 most liquid Japanese stocks listed on the Tokyo Stock Exchange including Toyota and Sony.

Lunate manages $105 billion of assets.

The ETF market will contribute to bolster "Abu Dhabi's plan to diversify its economy and attract more investors to its financial center," ADX's CEO Abdulla Salem Alnuaimi was quoted as saying in Thursday's statement.

Investors will be able to subscribe to the ETF between 16-23 May, Lunate added.

Business

China LNG Imports Could Hit Record Levels in 2024

Model of LNG tanker is seen in front of China's flag in this illustration taken May 19, 2022. REUTERS/Dado Ruvic/Illustration/File Photo
Model of LNG tanker is seen in front of China's flag in this illustration taken May 19, 2022. REUTERS/Dado Ruvic/Illustration/File Photo
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China LNG Imports Could Hit Record Levels in 2024

Model of LNG tanker is seen in front of China's flag in this illustration taken May 19, 2022. REUTERS/Dado Ruvic/Illustration/File Photo
Model of LNG tanker is seen in front of China's flag in this illustration taken May 19, 2022. REUTERS/Dado Ruvic/Illustration/File Photo

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.