China raised its liquefied natural gas imports for a second month in a row in June as the world’s top LNG buyer prepares for peak summer power demand.
Chinese imports of LNG jumped by 8.3% from a year earlier to 5.68 million tons in June, according to official customs data released on Monday. This was the second consecutive month in which China’s LNG imports increased from the year-ago period, following three months of falling LNG cargo arrivals in February, March, and April.
Chinese imports started recovering in May, rebounding from an eight-year low, as buyers started to purchase more cargoes in the middle of April, and have been keeping a high rate of imports since then.
The higher imports in China will tighten the LNG market in the coming months, all the more so that the Qatari LNG is now off the market again due to the renewed closure of the Strait of Hormuz amid the return of hostilities in the Middle East.
Prices of Asia’s LNG and Europe’s benchmark gas prices have jumped since the Iran war began, as the absence of Qatari supply made competition for alternative cargoes fiercer. Asia has been winning the race to attract LNG cargoes, leaving Europe scrambling for opportunities to refill its gas storage sites, which ended the heating season with stocks at multi-year lows.
Separately, China’s giant state LNG importers are reportedly in talks to secure long-term LNG supplies from exporters that don’t need the Strait of Hormuz, as the world’s biggest LNG buyer seeks to reduce its exposure to gas deliveries from the Persian Gulf.
China will not be seeking to cancel its binding contracts with Qatar, but it is exploring options to reduce its exposure to Gulf supply.
Some of the biggest Chinese LNG buyers, including PetroChina and Sinopec, are in talks with exporters for potential deliveries starting before 2030 for a period of at least ten years, sources familiar with the plans told Bloomberg on Friday.
By Tsvetana Paraskova for Oilprice.com
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