China's LNG traders emerge as worldwide swing suppliers

The Star

23-05-2025

PetroChina Co, the country's top gas supplier, is looking for upstream stakes in liquefied natural gas export projects. — Bloomberg
BEIJING: Chinese gas firms are taking advantage of diverse supply sources and a flexible power generation system to lean into the role of global swing suppliers.
PetroChina Co, the country's top gas supplier, is looking for upstream stakes in liquefied natural gas (LNG) export projects or flexible purchase agreements to help turn from a buyer in overseas markets into a bigger trader, said Wang Haiyan, deputy general manager at the firm's trading arm.
The company is looking to build its LNG portfolio to 35 million tonnes by 2030, a jump of 75% from now, he said during a recent panel discussion at the World Gas Conference in Beijing.
For China, it's a kind of role reversal.
Asia used to be the main source of demand and price-setting, while European nations acted as a sink, sopping up shipments in the event of a glut.
That changed after Russian pipeline gas flows to the continent were drastically cut following its invasion of Ukraine.
'The balancing role that used to be played by the European market has become China's role,' said Zhu Yanyan, general manager for the trading and commodities center at a unit of Cnooc Ltd, the country's largest LNG importer.
'The reason is quite simple – because China is well supplied with multiple resources.'
For example, Zhu said, China reduced LNG imports by about 20% in the first quarter as it redirected cargoes to Europe, where gas prices were soaring.
China made up about 75% of that gap with increased domestic production and pipeline imports, Zhu said.
The Asian nation has also boosted clean energy generation after installing a record number of wind turbines and solar panels, giving its gas power plants more flexibility to reduce electricity generation, Zhu said.
Other major gas demand sectors, such as factories, transport and home-heating, are less flexible.
Part of the shift for China is also the pursuit of profits.
Sometimes it doesn't make economic sense to bring LNG shipments into the domestic market when they can be resold for higher prices overseas.
China's gas imports have fallen in 2025, a decline centred on seaborne shipments of LNG that slumped 22% through April from the previous year.
Demand for LNG – the fuel carried in super-chilled tankers – is headed for its first annual drop since the height of the pandemic, just as new export projects are slated to come online, led by the shale gas fields of the United States. — Bloomberg