China’s natural gas imports soared to a record in December as the country battled a winter supply crunch, while crude oil imports eased sharply from near-record highs a month earlier, customs data showed yesterday.
December gas imports, including pipeline imports and tanker shipments of liquefied natural gas (LNG), came in at 7.89mn tonnes, 20% above November’s previous record of 6.55mn tonnes, data from the General Administration of Customs showed.
Imports for the whole of 2017 jumped 27% from 2016 to a record of 68.57mn tonnes.
A massive government push to heat millions of homes and power thousands of factories with natural gas in northern China has led to demand for the fuel outpacing supply, while delivery infrastructure has found it hard to cope.
“LNG imports last month reached new highs according to our cargo monitoring and pipeline imports from Kazakhstan and Turkmenistan also ramped from previous month,” said Diao Zhouwei, analyst of IHS Markit. Record imports by state energy firms and higher Chinese production have pushed down domestic wholesale LNG prices in north China.
Prices were around 5,500 yuan ($848.44) per tonne this week, off 45% from peaks seen in late December.
December’s crude oil imports hit 33.7mn tonnes, or about 7.94mn barrels per day (bpd). That was down 12% from November’s 9.01mn bpd, the second-highest level on record.
Buying eased in December as refiners and fuel distributors drew on inventories after hefty stockpiling in the previous month, said Seng-Yick Tee, analyst with SIA Energy.
Imports of crude oil for 2017 were up 10.1% over the previous year at a record 419.6mn tonnes, or 8.39mn bpd, up 770,000 bpd, according to Reuters calculations.
The import growth was fuelled for the second year in a row by independent refineries as the government allowed more firms to import crude, although some of them were forced to scale back operations as authorities stepped up environmental checks.
SIA Energy’s Tee said the 770,000 bpd increases in last year’s imports exceeded his forecasts, suggesting China’s domestic fuel demand may be stronger than official data showed.
“Given no big surge in fuel exports and mild stock builds in strategic (crude oil) reserves, the crude data points to under-estimates in domestic fuel productions,” Tee said. Refiners churned out a sizeable amount of blending components, such as mixed aromatics and diesel substitute “raw white oil”, that are not captured in official output data, Tee said.
Declining oil output at home also contributed to the demand for overseas purchases.
Daqing oilfield, the country’s largest, recorded a 7% fall in 2017 output versus the previous year, as operator PetroChina scaled back high-cost production at the ageing field.
Meanwhile China in December exported a record high 6.17mn tonnes of refined fuel, beating the previous peak of 5.79mn tonnes set in November.
Total annual oil product exports last year hit 52.2mn tonnes, up 8% over 2016.
The rush to export over the last two months of 2017 was spurred by additional quotas from the government.
Fuel imports last year rose 6.4% to 29.64mn tonnes.
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