PetroChina expects higher natural gas imports in 2020

Chinese state-controlled firm PetroChina expects to import 70bn m³ of natural gas this year, up by 2pc on 2019, with pipeline supplies making up almost 70pc of the total.

The company, China's biggest gas importer, expects pipeline supplies to hit 47bn m³ this year, said the general manager of the natural gas department at PetroChina International Wang Lei.

This will put LNG imports at 23bn m³ (16.68mn t). PetroChina's total gas imports in 2019 were 68.5bn m³, with 50.1bn m³ being pipeline imports and 18.4bn m³ (13.34mn t) LNG.

Pipeline imports from central Asia are expected to fall by 14pc to 39bn m³ this year from 45.4bn m³ in 2019. The central Asian imports, made under long-term contracts, are relatively expensive compared with lower priced spot imports, while the long-distance transmission tariff further affects competitiveness, Wang said. PetroChina has been asking its central Asia suppliers to deliver the minimum volumes under their take-or-pay contracts.

The remaining pipeline imports will come from Russia and Myanmar (Burma), at around 4bn m³ each. PetroChina is the country's sole importer of pipeline gas.

PetroChina expected to find it difficult to consume supplies from its long-term contracts and growing inventories with the pessimistic market outlook after the Covid-19 outbreak earlier this year. But gas demand has been supported by the country's economic rebound after China brought its outbreak under control since the second quarter.

PetroChina accounted of 52pc of China's total natural gas imports last year. Forecasts for a colder winter and continued coal-to-gas conversions might boost the company's LNG demand.

China's gas supplies could be tight during the peak consumption period in December and January, the country's main economic planning body the NDRC said earlier this week.

PetroChina made an 11.8bn yuan ($1.8bn) loss on sales of 30.5bn m³ of imported natural gas during January-June, comprising pipeline and LNG supplies, which widened by Yn632mn from a year earlier. The loss was the result of NDRC applying off-season natural gas prices for non-residential users to support China's economy, as well as oversupply of domestic gas that affected PetroChina's sales of imported LNG, the company said in its half-year results.

PetroChina pipeline gas imports (bn m&#179;) Jan-Aug 2020 Jan-Aug 2019 Jan-Dec 2019 Turkmenistan 19.5 22.9 33.2 Kazakhstan 5.0 4.8 7.1 Uzbekistan 1.9 3.2 5.1 Myanmar 2.8 3.1 4.7 Russia 2.4 - 5.34mn m&#179; (Dec) Source: China customs

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