The photo is sourced from offshorewind.biz
China and South Korea were the main drivers behind increased demand as they boosted LNG imports by 23 % (to 88.4 billion cu.m.) and 20 % (to 53 billion) respectively. For Japan, the rise was typically more moderate (3 % to 85.2 billion cu.m). – and that resulted in China assuming the top place world-wide in overall imports.
In India, imports dipped by 6 % (to 27.2 billion cu m.), but in absolute terms, that reduction (1.6 billion cu.m.) was much more modest than in Europe, where the decline in imports stood at 13.4 billion cu.m.
On the basis of equal dynamics, Asian prices were at a premium: in January 2021, spot prices for LNG in North-West Asia were $17.70 per million British thermal units (BTU) — more than twice as high as in Europe ($7.30 per million BTU). This served to stimulate LNG producers to reorientate their deliveries to Asia.
In September, prices in these two regions levelled off with each other to stand at about $22.8 per million British thermal Units – but that failed to attract to Europe enough suppliers for the planned flow of gas to underground storage areas. As at 1st October 2020, European storage areas were filled to 94.8 % of capacity, whereas as of 1st October 2021, that figure was only 74.6 %, according to data from the Gas Infrastructure Europe association.
Also affecting the rise in Asian LNG imports is the increased use of gas in power generation.
For example, in China from 2015 to 2020, electricity production from gas-fired stations rose by 1.5 times from 166.9 TWh to 248,7 TWh, according to data from the BP Statistical Journal. Over the first nine months of the year, the sum total of generation from coal and gas rose in China by 11.9 %, according to data from the Chinese Electricity Council. The background for this is a post-Covid recovery of the Chinese economy – while in 2020, GDP growth in China stood at 2.3 %, it will climb to 8 %, according to the October forecast of the International Monetary Fund.
Despite the current reduction in imports by China’s neighbour – India – these could rise sharply over the course of 2021. In April 2022, local company Swan Energy will bring into service an LNG storage and regasification terminal with a capacity of 5 million tonnes per year (6.9 billion cu.m.)
In India, demand for gas is spurred by a drive by regulators to boost the share of gas in the energy balance to 15 % by 2030 instead of 6.7 % as of 2020. Also contributing is the protracted process of urbanisation – India remains quite far behind China in this respect (35 % compared to 61 %, as cited by the World Bank).