China’s LNG imports from Russia hit 22-month excessive in August: sources

China purchases three Sakhalin LNG cargoes in August

Sturdy energy consumption boosts fuel demand

Drought in Sichuan spurs gas-fired energy plant load

China’s LNG imports from Russia reached a 22-month excessive of about 611,000 mt in August, transport information from S&P World Commodity Insights confirmed, on account of China’s continued reliance on Russian cargoes regardless of Western sanctions following Ukraine’s invasion.

China imported six LNG cargoes of about 71,000 mt every from Russia’s Yamal LNG terminal and three cargoes of about 62,000 mt every from the Sakhalin LNG terminal, in keeping with the transport information.

The Yamal cargoes are estimated to be largely time period contract volumes with about 15.7 million mt/yr contracted out of the 16.5 million mt/yr quantity, whereas the Sakhalin cargoes had been purchased within the spot market through tenders, market sources mentioned, including that the latter had been doubtless bought at a excessive low cost to identify LNG costs.

“Chinese language NOCs [national oil companies] have time period contracts with Yamal LNG … a few of them had been mentioned swapping cargoes available in the market — promote some non-Russia cargoes to Europe whereas purchase again some lower-priced cargoes within the spot market,” a commerce supply in Guangdong mentioned.

The Sakhalin LNG cargoes had been shipped to state-owned Sinopec’s Tianjin LNG terminal in North China Aug. 18, PetroChina’s Rudong LNG terminal in japanese Jiangsu province Aug. 21, and state-owned CNOOC’s Ningbo LNG terminal in japanese Zhejiang province Aug. 27, the transport information confirmed.

“We purchased some spot cargoes to replenish our inventories in preparation for the winter provide,” a supply with one of many nationwide oil corporations mentioned.

Chinese language LNG importers have largely in the reduction of on their LNG purchases within the spot market in 2022 as costs turned too costly for a lot of downstream consumers to afford and home demand was nicely equipped by cheaper pipeline fuel and time period contract volumes, sources mentioned.

LNG costs have risen on account of tight provide within the Atlantic basin. The Platts JKM each day bodily evaluation hit $71.01/MMBtu Aug. 25, the best since $84.76/MMBtu March 7, in keeping with S&P World information.

The Platts JKM for October eased to $49.381/MMBtu Sept. 2 following muted immediate shopping for curiosity.

Sizzling climate helps fuel demand

Sturdy demand from gas-fired energy crops due to sizzling climate in east China has pushed LNG terminals within the area to spice up immediate LNG inflows at a time when the nationwide oil corporations are stocking up for winter provide, a 3rd supply in Shandong mentioned.

“Jiangsu Rudong LNG terminal noticed strong gross sales of round 32 million cu m/day of pure fuel final week, in comparison with not more than 20 million cu m/day in regular days, a big a part of which had been despatched to gas-fired energy crops,” the supply mentioned.

The temperature in Jiangsu province was over 40 C over a number of consecutive days in August, main many gas-fired energy crops within the province to run at full capability to fulfill consumption, the provincial radio and tv station mentioned on its official web site Aug. 31.

Pure fuel transportation quantity to Jiangsu through state-owned PipeChina’s West-East pure fuel pipeline jumped 30% yr on yr throughout the summer time, the TV station mentioned. PipeChina equipped practically 400 million cu m further pure fuel quantity in August to 27 gas-fired energy crops in Jiangsu through its two native fuel storages — Jinhu and Jintan, the TV station mentioned.

In the meantime, pure gas-fired energy crops in Zhejiang province additionally ran at full working capability on account of a rise in energy demand over July-August within the wake of excessive temperatures and quickly enhancing financial exercise, the Individuals’s Day by day reported Aug. 17.

Zhejiang’s gas-fired and coal-fired energy crops have generated a report 9.17 million kW and 42 million kW of electrical energy, respectively, throughout the summer time, with the provincial grid buying a report 37.9 million kW from exterior Zhejiang, the Individuals’s Day by day mentioned, as energy consumption within the province surged 14.4% yr on yr over Aug. 1-16.

China’s fuel demand for energy technology hit a peak for any month in July, and August demand is estimated to stay excessive on account of drought and heat climate, Andre Lambine, senior analyst with S&P World mentioned. Lambine estimates China’s gas-fired energy technology at 44 aGW in July, 4 aGW larger than the earlier report in December 2021.

“Larger fuel burn was pushed by a mixture of hotter than regular climate and low hydro energy,” Lambine mentioned. “China skilled about 3 levels hotter than regular temperatures in July, and the warmth wave continued into August, so the excessive fuel burn is more likely to have continued in August.”

Sichuan drought worsens energy crunch

The drought in Sichuan province has decreased energy provide to east China, main gas-fired energy crops within the area to extend their working charges to make up for the hole, market sources mentioned. Practically one-thirds of the electrical energy produced in Sichuan is exported to east China, primarily Jiangsu, Zhejiang, and Shanghai, in keeping with sources.

Sichuan is the most important hydropower generator in China. Hydropower technology quantity accounted for 82% of the province’s whole energy technology in 2021.

Drought and excessive temperatures precipitated Sichuan’s hydropower technology to hunch 50% yr on yr in August, leading to energy provide shortages within the province, the native authorities mentioned Aug. 18.

Sichuan suspended energy provide to industrial customers over Aug. 15-20 and minimize transmission exterior the province to make sure ample energy provide to residents.