Baku, Azerbaijan, July 23
By Leman Zeynalova – Trend:
China may leave behind Japan in terms of liquefied natural gas (LNG) imports by 2022, Trend reports citing Wood Mackenzie research and consulting company.
By then, LNG imports in Japan are expected to decline 12 percent to 72.8 million tonnes per annum (mmtpa) compared to 2018, while China’s import volume rises 37.5 percent to 74.1 mmtpa, reads a report released by Wood Mackenzie.
The company believes that despite losing this leadership position, Japanese buyers will continue to take a lead in contracting innovation with developments such as hybrid deals, coal indexation, joint procurement and carbon neutral cargoes. “As several long-term contracts wind down from the early 2020s and with gas and power market liberalisation underway, this innovation will provide buyers more leverage and opportunities in future contracting discussions.”
“While LNG demand is declining, Japanese imports will remain above 70 mmtpa through much of the 2020s. It will remain the second largest LNG consumer in the world until at least 2040, with demand still exceeding 60 mmtpa. As such Japan still provides ample opportunities for LNG sellers, particularly as existing contracts expire,” said senior analyst Lucy Cullen.
Cullen believes that the decline in Japanese imports will be driven by competition from coal, nuclear and renewables in the power sector and slow macroeconomic growth.
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