what's going on with china lng demand?

the other night on TV was a show called "Two men in China" with John Doyle and Tim Flannery. It was pretty good imho.
But they had a segment on the smog in Beijing.
They interviewed an Aust couple who had been there for about 5yrs.
they lived in an apartment, and would not let their kids go outside to play, because of the smog.
it seems the smog is so bad, that it actually damages your respiratory system.
Now this family are returning to Aust, simply because of the smog issue.

So that TV show put the following article in perspective.

But also, it puts the L/B offer for WCL in perspective.

L/B is building a new Port, and has petrochemical businesses, so LNG seems to be a logical extension.

(also, I am still very suspicious of the Petrochina, MPO connection)

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What's going on with China LNG demand?
Jacob Gronholt-Pedersen |
16 May, 10:58 AM
Climate |

Reuters

China's imports of liquefied natural gas are growing at a record pace as it aims to use cleaner fuels to cut smog in big cities, creating a powerful new source of demand that has the potential to reshape the market for the super-chilled gas.

Rising Chinese demand gives LNG producers such as Chevron, Royal Dutch Shell, ExxonMobil and Total a crucial new sales avenue as they weigh whether to go ahead with $US180 billion in investments into potential new or expanded LNG projects.

Producers face rising costs in Australia – where many LNG projects are based – and uncertainty about longer-term demand in Japan and South Korea, the world's top two buyers of the fuel.

The Chinese, though, are spending billions of dollars in buying LNG-related interests overseas and in building new import terminals. LNG imports are up 35 per cent to 5.62 million tonnes in the first quarter against the year-ago period, according to customs data.

And imports are set to rise by a third this year, according to research firm Energy Aspects. They grew 25 per cent annually over the last four years, Thomson Reuters Point Carbon says.

"Producers are certainly looking at China, because that's the only market right now that will offer 2-3 million tonne deals," said Gavin Thompson, head of Asia Pacific gas and power at consultancy Wood Mackenzie.

By the end of this decade, China could overtake South Korea to become the world's second-biggest LNG buyer behind Japan.

The consultancy forecasts China's imports to rise to 61 million tonnes in 2020 from 18 million tonnes last year, led by supply from Australia. By comparison, South Korea's state-run Korea Gas Corp expects demand to rise to 45 million tonnes by 2020 from 40 million last year.

Japan and South Korea have increased LNG consumption to replace lost nuclear power, but uncertainty remains about the future of idled nuclear plants amid safety and cost concerns.

China's state energy companies, meanwhile, are already competing for supply by securing equity stakes in projects across the globe.

Malaysian state-owned oil firm Petronas said in April it will sell a 15 per cent stake in its $US11 billion LNG export terminal on Canada's Pacific Coast to China's Sinopec Group and state-owned power group China Huadian Corp .

Hurdles to demand growth

China plans to more than double its natural gas supply capacity to 400 billion cubic meters per year by 2020. Still, uncertainty remains about the pace of growth in a country where energy use is dictated by politics.

And consistently high LNG prices in Asia LNG-AS since the Fukushima disaster could hamper demand growth in China, as the country remains more price sensitive than Japan and South Korea.

Nevertheless, Asian prices are widely expected to fall as a new wave of Australian supply hits the market in the next 3-4 years, further boosting Chinese demand, industry observers say.

China's import needs also depend on how successful it is in developing its own unconventional gas resources. China, believed to hold the world's largest reserves of shale gas, hopes to replicate the US production boom.

"Whether or not China develops its own natural gas production can make a huge swing in the global demand," said David Carroll, vice president of the International Gas Union.

Until now, at least, it seems China's state energy firms have focused mostly on securing gas from projects abroad and shipping it to a string of new LNG imports terminals.

Import capacity is slated to rise from the current 31 million tonnes per year at nine terminals to over 80 million tonnes by 2018, when another 15 import terminals either approved or already under construction begin operations.

Add to that another 13 terminals that are either planned or proposed and capacity could top 110 million tonnes by the beginning of the next decade. By comparison, Japan last year imported 87 million tonnes of LNG.