China's LNG and pipeline gas imports climbed on the year in August, with pipeline deliveries rising for the first time this summer.
LNG receipts rose to 5.96mn t from 5.19mn t a year earlier, the country's customs data show. The 16pc year-on-year growth was up from a 4pc increase in July, when reduced industrial activity following a new wave of Covid-19 cases had weighed on demand.
Pipeline gas deliveries also rose by 8pc to 3.4mn t from 3.15mn t, customs data show. This was the first time since January-February that pipeline receipts quickened on the year, as falls in oil prices in March had provided an incentive to maintain slow deliveries of oil-linked volumes in recent months. Pipeline imports were 15pc lower in March-July than a year earlier.
Aggregate gas imports were the highest since they hit 9.51mn t in December. Low spot LNG prices may have encouraged strong purchasing activity from some Chinese LNG buyers ahead of winter, market participants said. And pipeline gas buyers may have had to start increasing deliveries to meet their take-or-pay obligations by the end of the year.
Stronger pipeline deliveries in the coming months could still leave plenty of space for additional LNG imports, as domestic production was expected to hold slower. China's National Energy Administration (NEA) forecast a 4.6pc increase in output this year from 2019, suggesting that production would have to fall by 3.6pc on average in September-December to reach the target. But LNG imports could grow sharply on the year in the fourth quarter even assuming a smaller downturn in domestic production than in the NEA's forecast.
Flows from Russia's new Power of Siberia project, which started to deliver gas to China in December last year, could fall short of the 5bn m³ that had been scheduled to be delivered by the end of the year, leaving more space for LNG imports. Gazprom used the line to supply 2.3bn m³ to China in January-August, suggesting that flows would need to more than double to 22mn m³/d in September-December to meet the 5bn m³ target. Planned maintenance on the line on 15-22 September may have curbed flows this month.
