By South China Morning Post | Created at 2024-10-06 01:43:02 | Updated at 2024-10-06 04:33:48
3 hours ago
China has reached an enviable place in energy markets. It is awash in natural gas supply and has enough suppliers to be able to dictate its own negotiating terms. China uses gas mostly for its power sector and as a way to help pivot away from coal to rein in carbon dioxide emissions.
That gas supply is now even larger. Over the past few weeks, there have been three developments to underscore Beijing’s natural gas ambitions. One is the start of commercial operations of Guangdong Energy Group’s new US$1 billion liquefied natural gas (LNG) receiving terminal in Huizhou, Guangdong province.
Meanwhile, French-based multinational Total Energies announced a five-year extension of its sales and purchase agreement with the state-run China National Offshore Oil Corporation for the delivery of 1.25 million tonnes of LNG per year until 2034.
And, last month, Chinese media announced that the second phase of the country’s first independently developed ultra-deep-water gas field, Shenhai Yihao, or Deep Sea No 1, had become operational in waters southeast of Hainan, China’s southernmost province.
China’s ample gas supply is no mean feat and did not happen overnight. It took years of concerted effort, planning and investment. The country is the world’s largest importer of LNG, lining up supply deals with top producers such as Australia, Qatar, Malaysia and others.
In lockstep, China has also become the world’s second-largest LNG reseller, cutting deals with countries where prices are higher than usual to plug supply gaps in their inventory levels. Chinese energy companies have also taken advantage of low LNG spot prices this year to boost supplies that would otherwise have been bought by other countries.
