China’s rising natural gas imports
China’s electricity council forecasts that, for the first time ever, in 2022 alternative energy sources such as wind, nuclear, solar and hydropower will make up half of China’s total power generation capacity.
Yet, at the same time China remains heavily reliant on fossil fuel imports. These imports still rise, mainly because China’s forecasted electricity consumption will increase by 5% to 6% in 2022, reaching 8.7 trillion to 8.8 trillion kilowatt-hours.
Talking about gas imports: the EU has a problem since the start of Russian-Ukrainian war, because many EU-countries largely depend on Russian gas. But the war is having an opposite effect in China, because of its alliance with Russia. China’s natural gas imports from Russia rose 50.5% in 2021. On December 14th that year, the Russian company Gazprom said that the daily amount of gas exports to China had been significantly increased under arrangements with China National Petroleum Company (CNPC), exceeding previously approved volumes for 2021. And a few weeks before the Russian-Ukrainian war started, on February 4th, 2022, Russia and China agreed on a 30-year contract to supply gas via a new pipeline and settle the new gas sales in euros. Gazprom, which has a monopoly on Russian gas exports by pipeline, agreed to supply Chinese state energy major CNPC with 10 billion cubic metres of gas a year.
All in all, in 2021 China’s natural gas imports by pipeline were 20% higher than a year before, and LNG imports grew more than 18%. Australia was still China’s largest natural gas supplier in 2021, accounting for 39.3% of the country’s total LNG imports, although these imports were down 4% compared to 2020. China’s second biggest natural gas supplier is Turkmenistan, and third in row in Russia. A salient detail: China’s LNG imports from the US, the fourth in row as gas supplier, saw the biggest jump, rising 187.4% in 2021.*
* sources: Forbes; S&P Global