China increases resale of the super-chilled fuel to other Asian buyers
China, the world's top importer of liquefied natural gas (LNG), is increasingly re-selling some of the super-chilled fuel to other Asian buyers as it looks to profit from price swings, according to Reuters.
Armed with a growing portfolio of long-term supply deals recently struck with Qatar and U.S. exporters, as well as extensive terminal capacity, Chinese companies led by state giant PetroChina are more actively trading LNG, but still lag far behind global majors such as BP, Shell and TotalEnergies.
Chinese customs data shows that China reloaded 617,000 metric tons of imported LNG during the first nine months of this year, compared with 576,000 tons in all of 2022, 26,000 tons in 2021 and 59,000 tons in 2020.
China's LNG sales have increased along with rising Asian demand after the disruption in Russian exports to Europe from the Ukraine war sparked price volatility and tightened supplies globally.
Asia spot prices soared to record highs of $70 per million British thermal units (mmBtu) last year. They have since eased to $17/mmBtu, encouraging demand from Asian buyers, but are still above single-digit levels seen before the COVID-19 pandemic.
Top Chinese LNG trader PetroChina International (PCI) is spearheading the retrading, which is recorded by Chinese customs as exports from bonded storage tanks.
South Korea has been the top buyer so far this year, taking 27% of China's reloads, followed by Thailand, Bangladesh, and Japan, as well as Kuwait, Chinese customs data showed.
While Qatari contracts carry rigid destination clauses, most U.S. supplies and some purchases from global portfolio players are tradeable. China also receives some LNG from Australia and Indonesia with flexible destination clauses.
State trader CNOOC and privately controlled Jovo Energy also re-exported a cargo each this year, both to Japan, Kpler data shows. The main reloading point has been the Yangpu regasification terminal, in the southern island province of Hainan, which can handle 3 million tons of LNG annually and is closer to southeast and south Asian buyers than China's east coast terminals, according to Kpler and ICIS.
Chinese LNG buyers have also been setting up or expanding trading desks in London and Singapore to better manage their supply portfolios.
China is now the world's second largest LNG re-exporter after Spain, which exported 1.7 million tons in 2022 and 1.15 million tons so far in 2023, Kpler data showed.
