International
Column: China buys more LNG, but can’t offset the rest of Asia’s losses
LAUNCESTON, Australia (Reuters) – Notwithstanding the achievement in shipping the first liquefied natural gas (LNG) cargo from the world’s largest vessel, Prelude owner Royal Dutch Shell probably wishes it was selling its product into better market conditions.
The Prelude floating LNG vessel – about four soccer fields long – dispatched on Monday its first cargo from its position off northwestern Australia to a customer in Asia, Shell said in a statement on Tuesday.
When Prelude was conceived more than a decade ago, Shell would have been confident that Asia was the right market to target for LNG, given the region’s strong energy demand growth and the need for cleaner fuels than coal.
The problem for Shell, though, is that Prelude is effectively the last cab off the rank, being the final of eight projects, collectively worth some $200 billion, to come online in Australia in the past five years.
Australia has now overtaken Qatar as the world’s largest producer of LNG, and while the long-term prognosis for the super-chilled fuel may still be positive, 2019 is proving a tough year in biggest market Asia.
Of the five biggest importers in Asia, only China has seen any growth in demand in the first five months of the year, compared to the same period of 2018.
China imported 23.9 million tonnes of LNG over January to May, up 22.6% on 19.5 million tonnes from the same months last year, according to vessel-tracking and port data compiled by Refinitiv.
It’s worth noting that while this looks like robust growth, it’s about half of the 41% rate China achieved in 2018.
The growth story in the world’s second-biggest buyer of LNG was overshadowed by declines almost everywhere else in Asia.
Top buyer Japan imported 32.9 million tonnes in the first five months of the year, down from 36.2 million. Third-ranked South Korea bought 16.8 million tonnes, down from 19.2 million.
India’s imports slipped slightly to 8.6 million tonnes from 8.8 million, and Taiwan’s fell to 6.6 million from 7.3 million.
Among smaller Asian buyers there was better news, with Pakistan boosting imports to 3.5 million tonnes from 2.9 million, Thailand’s take rising to 2.2 million from 1.7 million, and Singapore holding purchases steady at 1.4 million.
