China LNG Growth Not Slowing -Woodside

Tuesday, November 13, 2018

China's appetite for liquefied natural gas (LNG) has not slowed, but its purchases have been spread more evenly, avoiding last year's sudden spike to meet winter demand, Australia's top independent LNG producer said on Tuesday.

LNG demand from North Asia's main hubs in Japan, China and South Korea has slowed in recent weeks, raising concern that forecasts for a milder than usual winter may dent consumption. There are also signs that the ongoing Sino-American trade war is starting to dent industry in China.

"We're not seeing a slowdown," Woodside Petroleum Chief Executive Peter Coleman said.

"China learned from last year, from the last winter, that the peakiness in demand in the market really distorted the market. It distorted prices, and it meant they were not able to get gas to consumers in China during the peak of winter."

He said China has flattened that demand by buying across the year, while the volume overall has grown.

"So the total is increasing, but the peakiness has gone out of it," Coleman told reporters after speaking at the Melbourne Mining Club.

Woodside sells most of its LNG to customers in Japan and South Korea but has a tie-up with privately owned ENN Group to boost sales in China.

Coleman said Chinese demand for cargoes for delivery in February would be the real measure of how prepared the system is for winter. Those cargoes would need to be bought in December.

"So in December we'll start to see how people feel they're positioned," he said.

Energy consultants Wood Mackenzie expects China's LNG demand to be 28 million tonnes this winter season, which runs from mid-November to mid-March, up 30 percent from last winter.

Coleman said in the short-term there had been no impact from the U.S. trade war with China, as U.S. LNG cargoes were making bigger margins flowing into Europe instead of Asia at the moment.

Longer term, the trade war may delay final investment decisions for some new LNG projects in the United States, especially those being built by smaller companies, which need buyers to underpin long term contracts.

"You're not seeing the Chinese buyer in that particular market at the moment," Coleman said.

Australian-listed LNG Ltd last month said it was delaying a final decision on whether to build its Magnolia LNG plant in Louisiana, citing difficulty in lining up Chinese customers due to the trade war.


(Reporting by Sonali Paul; editing by Richard Pullin)

Categories: Energy LNG Asia Natural Gas

Related Stories

PV Drilling Takes Ownership of Noble Corporation’s Stacked Jack-Up Rig

Hanwha Ocean Enlists ABB for Singapore’s First Floating LNG Terminal

Seatrium Signs FLNG Vessel Upgrade Deal for Golar LNG

Cheniere, JERA Ink Long-Term LNG Sale and Purchase Agreement

Shelf Drilling Lands New Jack-Up Contract in Vietnam, Extends Egypt Deal

Seatrium Engages Axess Group to Clear FPSOs for Brazil Deployment

Woodside Finds South Korean Partners to Advance LNG Value Chain

Woodside Agrees Long-Term LNG Supply with Petronas Unit

Wood JV Gets EPC Job for Shell off Brunei

CDWE Wraps Up Pin Pile Installation Job for Taiwanese Offshore Wind Farm

Current News

MODEC Ramps Up Hammerhead FPSO Work After ExxonMobil's Go-Ahead

Aesen, DOC JV Targets Subsea Cable Logistics

Timor Gap Boosts Stake in Finder Energy’s Timor-Leste Oil Fields

SBM Offshore Starts Construction of FSO for Trion Oil Field off Mexico

Russia Targets 2028 for Sakhalin-3 Gas Project Start Up

Seatrium Secures ABS Backing for Deepwater FPSO Design

MDL Secures Cable Laying Job in Asia Pacific

Hibiscus Petroleum Starts Drilling at Teal West Field off UK

Yinson Production Nets DNV Approval for New FPSO Hull Design

Hanwha Ocean's Tidal Action Drillship Starts Maiden Job with Petrobras

Subscribe for AOG Digital E‑News

AOG Digital E-News is the subsea industry's largest circulation and most authoritative ENews Service, delivered to your Email three times per week

https://accounts.newwavemedia.com