The photo is sourced from upstreamonline.com
Economic recovery that followed lifting of the Covid restrictions was the demand growth driver. If in 2022 GDP growth was 3.0%, it will reach 5.2% by the end of 2023, according to the International Monetary Fund’s July forecast. The corresponding growth in energy demand has already led to power generation increase, with gas accounting for 3.3% in China in 2022. According to the China Electricity Council, utilisation of thermal power plants (including gas and coal fired ones) in China during the first eight months of 2023 increased by 2.3% compared to the same period in 2022, reaching 2,999 hours, which is more than half of the total duration of the first eight months of the year (5,832 hours).
Increased demand in China led to reduced availability of LNG in Japan, where, as a result, commercial LNG stocks have reached multi-month lows. According to the Ministry of Economy, Trade and Industry of Japan (METI), LNG stocks in Japan fell 1.9% to 1.56 million tons for the week ended September 24, 2023. A lower weekly figure was last recorded on March 6, 2022, when commercial LNG stocks fell to 1.45 million tons. On a month-end basis, the current level is the lowest since January 2021, when commercial LNG stocks in Japan reached 1.49 million tons.
Overall, Asia-Pacific (APAC) countries continue to play a defining role in the global LNG market, while also remaining leaders in the potential for further demand growth. According to the Global Energy Monitor, the global capacity of LNG regasification terminals under construction reached 193 million tons per year by July 2022, of which APAC accounted for 75%.