Analysts report that China has stockpiled sufficient natural gas to meet winter demand, with state-owned providers nearing their injection targets. This proactive approach comes as importers prepare for potential price spikes linked to the Iran war. Xiong Wei of Rystad Energy AS noted that the high storage levels reflect a strategic move to ensure supply security.
Despite the strong reserves, recent declines in liquefied natural gas (LNG) inventories at import terminals could create a 2 million-ton restocking demand. The lack of official data on China’s stockpiles makes market monitoring challenging, but the high underground storage levels indicate a clear focus on meeting winter needs.
Milder temperatures due to the El Niño weather pattern may reduce gas demand, but concerns persist over competition for LNG, especially in Europe. Asian spot prices have remained near four-year highs, prompting industrial buyers to avoid spot cargoes. Analysts warn that weaker demand could continue into next year if the Middle East crisis keeps oil prices above $100 per barrel.
The potential for reselling contracted LNG cargoes abroad could ease global competition, according to Nicole Li of OilChem. Zhou Shuhui of the China Petroleum Planning and Engineering Institute emphasized that China’s secured gas resources through 2030 provide flexibility in global markets.