China will import more liquefied natural gas (LNG) to compensate for supply shortages, Zhang Guobao, head of China’s National Energy Administration, said Sunday. Accompanying this increase in imports would be an expansion of LNG terminals, pipelines, and storage facilities in coastal areas. China’s LNG imports in 2009 made up nearly 6% of total annual gas consumption.
China already imports gas from Malaysia, Qatar, Papua New Guinea, Australia and Indonesia, but there have been shortages since intense cold weather struck in February. Zhang invited Chinese enterprises to secure more long-term contracts in an effort to further diversify foreign natural gas sources.
Despite a lapsed LNG deal between China Petroleum and Chemical Corp (Sinopec) and Australian producer Woodside Petroleum, China has multiple new LNG import projects underway, including a gas pipelines running from Turkmenistan and Myanmar. Nevertheless, the increased demand for LNG will intensify China’s efforts to develop sources at home and abroad, including its offshore reserves.
LNG infrastructure spending will focus on southern Guangdong and Shandong provinces. The increased import demands will also prove a boon to companies involved with LNG transport, including China State Shipbuilding Corp, the largest Chinese shipyard, which recently launched three new self-developed LNG vehicles in order to assist in meeting import demand. The company has a subsidiary listed in Shanghai, China CSSC Holdings (600150.SH).