China’s old gas allies fail to meet demand boom in winter

Bloomberg

China’s natural gas imports from Central Asia, a long-time source of the fuel via pipeline, slipped last month, worsening a winter shortage and increasing the world’s biggest energy user’s reliance on seaborne supplies.
Imports during January from Turkmenistan, China’s biggest overseas source of gas last year, dropped 14 percent from a year earlier, and 4 percent from December, data from the General Administration of Customs showed. Shipments from Uzbekistan and Kazakhstan dropped 42 percent and 24 percent from a month earlier, respectively. China National Petroleum Corp., the nation’s dominant pipeline gas importer, declined to comment.
China’s gas demand surged last year under President Xi Jinping’s campaign to fight smog by switching industrial and residential coal users in northern China to cleaner-burning gas. The push resulted in heating shortages during winter in some parts of the country where infrastructure needed for the transition hadn’t been completed on time.
Imports of LNG, a super-cooled form of the fuel transported on tankers, totaled a record 5.18 million tons in January, up 51 percent from a year earlier. Supply via pipeline gained 8.2 percent to 2.59 million tons.
“Government is expected to resolve issues related to inconsistent gas imports from Central Asia and have suppliers respect contracts,” Miao Yingying, an analyst with Beijing-based industry researcher JLC, said by phone. “That being said, China’s reliance on LNG shipments will likely continue to grow given new terminals are starting up and LNG’s higher flexibility to help meet the nation’s peak-shaving demand.”
CNPC, also the nation’s largest producer of gas, said earlier this month that supply from the Central Asian nations went into a “ sharp decline” as of Jan. 30, without providing
details. Turkmenistan supply had been reduced in October and November because of a malfunction in a gas-processing facility located in the Central Asian nation, JLC said in January.
The Central Asia pipeline opened in late 2009 and the region was the largest source of China’s gas imports until last year, when it was overtaken by LNG shipments.