China’s LNG Terminals Underutilized
According to an Interfax analysis of customs data, China used just over half its LNG regasification capacity in 2014, as tariff hikes and cheaper competing fuels hit gas demand growth.
Slow downstream demand, driven by rising natural gas prices and sluggish GDP growth, coupled with rising pipeline imports and plunging prices of alternative fuels, have halved China's LNG consumption growth, said industry sources.
While Chinese LNG imports in 2014 were up 10.3 percent from 2013, the growth was lower than the 20.3 percent and 22.7 percent registered in 2012 and 2013, Platts data showed.
Slower demand growth has also kept import infrastructure underutilized — the average utilization rate at China's 12 LNG import terminals was at 55.2 percent in 2014 — and has clouded the outlook of future import projects, said industry sources.
Ten of China’s 12 operational LNG terminals were online for the full year and they used an average of 55% of their capacity, based on total imports of 19.5 mt. China’s regasification capacity is around 35 mtpa.
This is lower than the 67.2% achieved in 2013 when seven terminals were operational, and indicates that, although China’s regasification capacity has expanded, the country is struggling to make full use of it.
China National Offshore Oil Corp. (CNOOC) had seven operational terminals by the end of 2014, but the latest – Hainan LNG on the southern island province – was only commissioned in August.
