China LNG demand growth could already be stalling
Forecasts for even more record China LNG demand growth were seemingly a given among most analysts. However, new analysis shows a different scenario unfolding.

Changes are underway in LNG markets in Asia, home to around two-thirds of global demand for the fuel. Much of the change is coming from China, the world’s largest LNG importer since it bypassed Japan three years ago to take the top slot.
In 2023, China, the world’s second largest economy, imported 98.4 bcm of LNG, up 11.7 percent year-on-year.
On June 20, Bloomberg reported that China’s LNG growth could already be stalling due to the availability of alternative fuel sources. This includes thermal power investment, primarily in new coal plants, which climbed 15 percent in 2023. Added to the energy supply equation, China is also subsidising overcapacity in coal power as a back up to wind and solar power. This in turn skips using gas as a transition fuel.
Other power sources that are also taking market share away from gas include hydroelectric dams and solar farms. In May, electricity generation from these two energy sources increased by 39 percent and 29 percent, respectively, the report added.
Moreover, China’s LNG terminal capacity is expanding faster than demand and is expected to nearly double from current levels to 251 million tonnes by 2030. This will lead to lower utilisation rates among China’s larger LNG importers.
Min Na, Head of Asia LNG at Energy Aspects, told Gas Outlook that she also sees long term demand for the fuel in China weakening. “We see Chinese LNG demand growth slowing to an average of about 6-7 Mt/y over 2025-28, from an average of 10 Mt/y over 2017-24, excluding the year 2022,” she said.
She attributed the slowdown to a combination of total gas demand growth moderating, continued ramp-up of pipeline imports as well as increased domestic production.
Russia is China’s largest pipeline gas supplier. In 2023, Russian gas exports to China via the Power of Siberia (PoS) pipeline totaled 22.7 bcm, 0.7 bcm higher than the contracted volume and up 47 percent from deliveries of 15.4 bcm in 2022, S&P Global reported.
The PoS 2 pipeline, due to become operational by 2033, will increase Russia’s pipeline capacity to China to 98 bcm per year. Notably, pipeline gas is cheaper than imported LNG. This could also dampen China’s appetite for extra LNG procurement.
China’s gas production, for its part, reached 230 bcm in 2023, according to China’s National Energy Administration. This marks an annual increase of 10 bcm for seven consecutive years, with that trajectory likely to continue.
Meanwhile, more domestic gas supply is on its way. China’s state-run offshore oil and gas developer China National Offshore Corp. (CNOOC) announced in March what it described as a “major” deepwater gas discovery in the deep waters of the South China Sea. According to CNOOC estimates, the discovery contains some 100 million barrels of oil equivalent.
Net zero by 2060 pledge
China could also be ahead of schedule on reining in its emissions, Bloomberg said. These developments are casting doubt on what the report calls the “long held view on China using even more of the cleaner burning fuel” as a transition fuel from coal to renewable energy that’s earmarked to help the country reach its arguably questionable net zero by 2060 pledge.
China, along with Indonesia, is one of only two major economies that decided to peg its net zero goal to 2060 instead of 2050. The move initially triggered criticism from the international community due to China’s overweighted emissions from its power sector that’s still largely fuelled by coal and gas.
Since then, analysts have appeared to soften their stances, now contending that China’s pledge shows initiative, while creating more momentum both at home and abroad to decarbonise. Notwithstanding, China remains the world’s largest CO2 emitter, accounting for nearly 31 percent of the world’s total emissions in 2022.
China as a secondary LNG trader
However, any downturn in Chinese LNG procurement has to be put in context. China’s LNG intake is forecasted to increase by 13 percent to 14 percent this year. That’s down from the 18 percent growth over the past three years, but it will still maintain its top LNG importer slot. As such, China will also maintain its position as a major secondary trader of the fuel.
China has been reselling some of its extra LNG to other Asian buyers as it looks to profit from price swings. It’s also redirecting cargos to Europe ahead of the continent’s approaching winter season, Reuters reported on June 25th. China bought LNG at lower prices over the last several months on the spot market to also boost gas storage levels, the report added. These spot purchases along with a list of long-term off-take deals will help China’s secondary LNG trading pursuits.
The Japan/Korea Marker (JKM), the spot price index for LNG delivered to North Asia, is currently trading around the mid-US$12 per million British thermal unit (MMBtu) price point, up US$1 MMBtu year-on-year.
JKM spot prices from January 1st to April 15th, however, ranged around the mid-US$8/MMBtu to upper US$9/MMBtu price points. Prices broke through resistance at US$10/MMBtu in mid-April and have trended to current levels at US$12.635 MMBtu. Higher prices since April are attributed to record high temperatures in the region from the El Niño weather pattern.