In January, Chinese LNG imports were down y/y by 0.53 Mt (-20%) to 2.12 Mt. Pipeline gas imports grew again y/y by 0.38 Mt (21%) to partially offset the decline in LNG takes. Imports from Turkmenistan increased y/y by 0.55 Mt (37%), while imports from Myanmar and Kazakhstan both fell y/y. Total gas imports to China were at 4.28 Mt in January, which is lower y/y by 0.15 Mt (-3.4%).
China experienced mild weather in January, with HDDs down by 1% y/y, hotter than the warm 2014, with 11% fewer HDDs than the five-year average. The y/y reduction in heating demand, although only modest, explains part of the y/y decline in total gas imports.
In terms of sources, LNG imports from Qatar fell by 0.73 Mt (-57%) y/y, and with these most likely to be spot purchases, it is clear what volumes are being pushed out of the region. Imports of Malaysian LNG also fell by 0.09 Mt (-21%), while y/y imports were up from Australia by 0.06 Mt (18%) and from Indonesia by 0.04 Mt (16%).
Chinese domestic gas production numbers are yet to be published for January, but production grew over 2014 by 9.3% y/y (10.6 bcm). With good y/y growth being recorded, and with domestic demand staying lower on the mild winter weather, imports have suffered.
Power generation numbers have also not been published for January yet, although 2014 ended with strong increases in hydro (up by 46% in December), nuclear generation (up by 24%) and other renewables (up by 24%), with all three benefitting from new generation capacity being built in 2014.
Over 2014, China added 104 GW of generating plants, with 47 GW thermal, 22 GW hydro and 34 GW both nuclear and renewables. This is the second year in a row where more low carbon generation was added than thermal capacity. In 2013, 36.5 GW of thermal power generating capacity was added.
The decline in LNG imports came against a background of the decline in LNG prices. With January spot cargoes being purchased back in November when LNG prices were around the 14 $/mmbtu mark, such levels were unlikely to be attractive to Chinese buyers.