LAUNCESTON: The world imported more liquefied natural gas (LNG) in 2022 than ever before, but the war in Ukraine has meant that the growth was concentrated in wealthy European countries and away from poorer Asian countries, including Pakistan and Bangladesh.
Total global LNG imports rose to 409 million tonnes last year from 386.5 million tonnes in 2021, according to data from Refinitiv, while figures from commodity analysts Kpler showed a slightly lower 400.5 million tonnes, up from 379.6 million tonnes.
The record volumes were to be expected given the commissioning of new supply trains as well as increased demand for the super-chilled fuel, especially from Europe as it turned away from Russian piped natural gas in the wake of Moscow’s Feb. 24 invasion of Ukraine.
But 2022 also reversed the dynamic where growth in LNG demand came from developing nations in Asia, with China giving its crown as the top importer back to Japan.
China imported 64.44 million tonnes of LNG in 2022, down 19.4% from the previous year, according to Kpler data.
Japan’s imports also slipped, dropping to 73.61 million tonnes in 2022 from 75.35 million tonnes in 2021, but this was still enough to overtake China.
The main dynamic driving lower Chinese imports was that buyers in the world’s second-biggest economy largely stayed out of the spot market, instead taking only cargoes under long- and medium-term contracts.
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This was driven by surging spot prices, with the weekly Asian assessment hitting a record high of $70.50 per million British thermal units (mmBtu) on Aug. 26, which was three times the low of $23 reached in the week to Jan. 21 as winter demand eased.
The spot price has eased since its record high, ending at $25 per mmBtu in the week Jan. 6 as inventory levels remained ample and a mild winter limited demand.
Nonetheless, it remains high by historical standards, with the spot price never having exceeded $20.50 per mmBtu prior to 2021, and dropping to as low as $2 in mid-2020 at the height of lockdowns during the initial outbreak of COVID-19.
The high prices have taken their toll not only in China, which is arguably better placed than many developing Asian economies to cope with the increased cost.
India’s imports dropped for a second year in 2022, falling to 20.03 million tonnes from 24.01 million tonnes in 2021, according to Kpler. It was the weakest outcome since 2017, underscoring how much Asia’s fourth-largest LNG importer struggled to handle high prices.
Other Asian nations such as Pakistan and Bangladesh also saw lower LNG imports in 2022, and overall the continent’s imports slipped to 263.76 million tonnes from 282.08 million tonnes the prior year.
