Regional LNG: China LNG import capacity may reach 20 MT in 2010: Report

China's booming economy and surging power demand will see liquefied natural gas (LNG) import capacity grow from zero to 20 million tons in the next five years, Reuters reported on Tuesday.

A consortia of buyers from China, the world's second-largest energy consumer after the United States, is due to import the country's first LNG shipments next year from Australia's largest resource development, the A$14 billion (US$ = A$1.32) North West Shelf (NWS).

?Rapid economic development and power demand provides a huge potential market,? Li Rongguang, general manager of China National Offshore Oil Corp (NWS Private Ltd) told an oil and gas conference in northern Australia.

By 2010, China's gas consumption will more than treble to 3.9 trillion cubic feet (tcf) from 1.2 tcf in 2003, outstripping production growth, which is projected to rise to 2.6 tcf from 1.1 tcf over the same period, Li said.

?By 2010, our LNG import capacity is expected to reach around 20 million tonnes and by 2020, between 50 to 60 million tons.?

CNOOC, parent of listed CNOOC Ltd, is the frontrunner in China's budding LNG business, with its first terminal at Guangdong to import around 3.4 million tonnes of LNG per year from the North West Shelf from 2006.

Another terminal in Fujian will import 2.6 million tons per year (tpy) from the Tangguh project in Indonesia, which is due to start up in 2008, with two more 3-million-tpy terminals in Zhejiang and Shanghai due to be completed by January 2008.

China has at least nine LNG import terminals now under consideration, of which seven are led by CNOOC, although industry sources said as many as 20 had been proposed.

Beijing is actively promoting LNG -- natural gas that has been super-cooled for transport -- to diversify away from dirty coal while meeting double-digit demand growth for electricity.

Coal makes up 68 percent of China's primary energy consumption, against 23 percent for oil, 1 percent for nuclear, 5 percent for hydro and 3 percent for gas, Li said.

The government is aiming to increase the share of natural gas in its energy mix to 7 percent by 2010.

The Australian Bureau of Agriculture and Resource Economics (ABARE), a government commodity forecaster, told the conference that the largest growth was expected from China and North America, with little scope for much increased consumption in Japan, now the world's biggest LNG importer.

Karen Schneider, ABARE deputy executive director, said LNG demand in the Asia-Pacific was expected to rise to 125 million tons in 2010 and to more than 150 million tons in 2015.

World LNG trade was 132 million tons last year of which two-thirds was in the Asia Pacific, she said. (*)