If demand for liquefied natural gas grows in China, its supply to Europe may be reduced, an industry analyst at Goldman Sachs Group Inc. told Bloomberg Television. Samantha Dart.
Demand for LNG in China fell due to covid restrictions, which allowed the PRC to replenish its stocks and gave importers the opportunity to resell LNG shipments, taking advantage of the surge in its value in the world market. This increased the availability of energy for European buyers, she explained.
„Chinese companies resold LNG on the spot market. The more they resell, the more affordable gas for Europe,” the expert said. „This situation carries a serious risk – as soon as economic activity in China starts to grow, we will see a rapid change in the situation, will get less LNG.”
China’s natural gas consumption declined in April and May and was almost the same as a year earlier in June, Dart said.
According to Wood Mackenzie Ltd. forecast, China’s LNG imports will decrease by 14% in 2022.
The shortage of natural gas, Dart said, means that countries will have to be more flexible in their planned transition to low-emission energy sources. „Now there are no options but to use coal, oil and other fuels,” she said.