China LNG plants have planned to ramp up the production in October, but will further reduce LNG imports due to ample domestic supply and higher imported prices, learned by OilChem.
Looking back on September, with the end of unit maintenance, domestic LNG production increased 1.72% MoM to 1.87 million tonnes, while LNG imports tumbled 10.67% MoM to 5.63 million tonnes due to rising international spot prices.
During the National Day holiday in the first week of October, PetroChina, a state-owned refinery, cut feed gas selling prices, which stimulated LNG plants to operate at high run rates, and the transactions were settled at Yuan 2.08/cum for delivery over October 1-5. This is equivalent to a production cost of Yuan 3,795/t, much lower than Yuan 4,440-4,575/t in last the auction closed in H2 September.
As a result of low feed gas prices, more and more LNG plants have been running at full rates, thus lifting the LNG production, which is projected to increase 8% MoM to 2.02 million tonnes in October.
On the other hand, LNG imports have continued to decline due to abundant domestic supply and rising import prices from Yuan 4,596/t in September to Yuan 4,936/t in October. OilChem expects that China's LNG imports will slump 25.67% MoM to 4.18 million tonnes in October.
2023 China LNG Production
Source: OilChem
2023 China LNG Imports
Source: OilChem
Written by Sunny Fang, fss@oilchem.net
Edited by Aggie Hu, huchenying@mysteel.com
