China's growing market for natural gas and liquefied natural gas (LNG) is expected to cool down, with growth in demand as well as growth in imports of LNG declining from the dizzy growth rates of recent years.
A new natural gas pipeline planned to carry gas from the eastern gas fields of Russia to China could further consume some of the increase in Chinese LNG imports in a few years when the pipeline begins to work.
Russia's gas giant Gazprom stated earlier this month that the Siberia Power pipeline to China will be supplied with gas as planned, with operations scheduled to start in December.
While the initial volumes of Russian gas exports to China will be small and unlikely to have a significant impact on China's LNG demand this coming winter, at full capacity by 2023, Russia's pipeline is set to deliver as much as 9.6 percent of China's projected gas supply, potentially denting LNG import production, S&P Global Platts predicted.
Russia will begin shipping gas to China at a period when development in Chinese natural gas and LNG demand is slowing down as economic growth is weakening. However, analysts do not see China's demand for gas and LNG beginning to fall in the years and decades to come.
The Chinese requirement for natural gas will continue to rise in the next coming years as the country favors increased use of a clean-burning natural power to cushion toxic levels of pollution.
Even at its slower pace, the increase in LNG imports can allow the country to outstrip Japan as early as next year to emerge as the leading LNG importer in the world.
While market observers see no end to growth in LNG imports in the foreseeable future, experts and Chinese economic officials admit that growth will wane in the years ahead, with such a first slowdown as early as this year.
China's weakening economic growth is taking a toll on the rise of gas production. Recently, the Chinese government acknowledged that the rise in gas demand this year would decline from the growth rate of last year- to 10 percent from 17.4 percent growth in 2018.
State-run Sinopec Gas Company chimed in with a different prediction last week, stating that demand for natural gas is expected to increase by 10 percent this year, at a faster rate of growth than in previous years, due to sluggish economic growth.
Chinese gas demand is expected to grow by almost 10 percent this year, hardly a poor performance, but not meeting the 17 percent increase seen in 2018, analysts said.
