China is set to overtake Germany to become the world’s biggest importer of pipeline natural gas this year, as the Asian nation bolsters its energy security.
After almost matching Germany in 2024, China is expected to take the No. 1 ranking as it boosts imports from Russia, according to Rystad Energy. Recent pacts between Beijing and Moscow, including the decision to proceed with the Power of Siberia 2 pipeline, will consolidate that position, Rystad partner Martin Opdal said at a webinar, presenting an annual report prepared with the International Gas Union and Italian gas-grid operator Snam SpA.
That shift underlines the transformation of the gas market since Russia’s invasion of Ukraine in 2022 upended global commodities trade.
Germany, which used to rely heavily on relatively cheap pipeline fuel from Russia’s Siberian fields, switched to liquefied natural gas delivered by tankers from the US and other suppliers. That’s cut its exposure to Russian gas, but triggered greater price volatility as Europe competes for LNG with other regions.
Norway remains the biggest supplier of pipeline gas to Europe, including Germany, but with no spare capacity, the region is being forced to increase LNG purchases.
China, meanwhile, is forging closer ties with Russia, which has spare capacity after 90% of its pipeline supplies to Europe were halted following the invasion of Ukraine.
Most major countries are now trying to have a variety of supply sources, both LNG and pipelines, Mark McCrory, IGU director for strategy and advocacy, said at the same webinar. “‘China is probably a good case study of how you create lots of options for yourself,” he said.
Earlier this month, Moscow agreed with Beijing on a memorandum to potentially build a massive new gas pipeline to China, while expanding other routes too. Much of the detail remains unclear.
China’s piped imports are projected to climb to 79 billion cubic meters this year, compared with less than 71 billion for Germany, according to Rystad’s Opdal. In 2024, it was 70 billion and 71 billion cubic meters, respectively.
By contrast, China’s demand for spot LNG has been muted so far this year and it may lose its position as biggest importer to Japan in 2025, based on ship data compiled by Bloomberg year-to-date.
Talks about a potential Ukraine peace agreement had pushed European gas prices to the lowest in a year last month, amid expectations that some pipeline Russian supplies could return to Europe. But the prospect for peace negotiations remains uncertain.
Germany sees risks of demand for gas power plants surging in the next decade, if the adoption of renewables and flexible technologies slows. Still, the European Union is pressing ahead with a plan to end all Russian gas purchases by the end of 2027.
Overall, global gas demand rose 1.9% in 2024, topping 4.1 trillion cubic meters, and is forecast to increase 1.7% this year, according to the IGU report. It sees demand over the next decade outstripping most expectations.
Even with net zero targets — before 2050 in the EU and 2060 in China — gas retains its vital role for years to come “in supporting intermittent renewables,” according to the report. The gas sector is boosting efforts to reduce emissions, from integrated carbon capture and storing at LNG plants to full or partial electrification of gas transportation and storage operations.
Still, geopolitical tensions are clouding long-term outlooks for the market and the pace of the energy transition, while more frequent extreme weather and technological drivers, such as the AI, are “complicating global demand and supply dynamics,” it said.