China may overtake Japan as the world’s biggest liquefied natural gas (LNG) importer earlier than anticipated as China recovers from the coronavirus pandemic, while Japan’s economy remains in a slump, Rystad’s head of gas research said.
Japan’s LNG imports fell in May to an 11-year low of 4.5 million tonnes as the pandemic halted economic activity, official data on Wednesday showed.
That is less than the 5.6 million tonnes China imported in May, ship-tracking data from Refinitiv shows. For June, China is set to import 5.4 million tonnes and Japan 5 million tonnes, the data shows.
“With China expanding its regasification capacity this year and also having a more accelerated recovery there is a risk a China having higher imports from this year,” Rystad’s Head of Gas and Power Markets Research Carlos Torres Diaz said.
Rystad now forecasts China to surpass Japan in 2022, at 80.1 million tonnes a year versus 74.3 million tonnes. Many analysts foresee China overtaking Japan by about 2025.
Japan has been world’s biggest LNG importer for decades and the change would signal a major shift in one of the fastest growing energy markets.
China has not released official data for May and the Refinitv shipping data may not correspond exactly. China’s monthly LNG imports previously exceeded Japan’s in November.
Japan’s energy demand has declined because of an ageing population and LNG requirements have dropped as it restarts nuclear reactors, but the coronavirus pandemic caused LNG demand to fall further.
China has mainly contained its outbreak and gas demand has soared with a government push to move consumers from coal-fired power and heating to cut pollution.
Japan’s LNG imports through June 2020 are set to be 36.1 million tonnes versus 30.8 million to China, the Refinitiv shipping data shows, though that gap may narrow.
“It wouldn’t surprise me if China permanently overtakes Japan sooner,” said Tom O’Sullivan, the founder of energy consultancy Mathyos Japan.
Source:Reuters
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