LONDON, June 26 (Reuters) – China will become the world’s top importer of natural gas next year, boosted by liquefied natural gas (LNG) purchases, as its superpower economy grows and weans itself off coal-generated energy, the International Energy Agency said on Tuesday.
In its Gas 2018 annual report, the IEA said Chinese demand for natural gas will rise by almost 60 percent between 2017 and 2023 to 376 billion cubic metres (bcm), including a rise in its LNG imports to 93 bcm by 2023 from 51 bcm in 2017.
Imports of LNG, natural gas super-chilled to liquid form so it can be transported around the world on vessels, will rise to 505 bcm by 2023 from 391 bcm last year, a rise of 114 bcm, including China’s 42 bcm growth.
Global LNG exports meanwhile will surge 30 percent by 2023 with the United States becoming the second largest supplier in the world, compared to its negligible exports last year, thanks to the shale revolution that has transformed its energy markets.
The report from the Paris-based agency highlights the might the two powerhouses have over global energy markets just as U.S. President Donald Trump squares off with Beijing over trade.
China threatened tariffs on U.S. oil and gas in retaliation to taxes imposed by Washington on $50 billion worth of Chinese goods, although U.S. LNG was not included in that threat.
China’s rise to the top spot next year as an importer of both piped gas and LNG will knock Japan into second place but they together with South Korea continue to dominate the markets.
China, Japan and South Korea imported 55 percent of the 391 bcm of LNG sold last year and will buy 48 percent of the 505 bcm of LNG sold in 2023.
When all of Asia is taken into account, LNG sales there will rise to 75 percent of all LNG sold globally from 72 percent last year.
The demand for LNG in the top three Asian buyers has been driven by policy as they move to the cleaner-burning energy source from coal-fired power plants.
In Japan, the Fukushima nuclear disaster accelerated demand after nuclear plants went off line.
In other Asian countries such as Indonesia, composed of hundreds of islands, vessel-borne gas is a convenient, cleaner and cheaper way of receiving energy than constructing pipelines for gas or using petroleum products such as diesel.
On the production side, global natural gas output will rise 10 percent by 2023 to 4.12 trillion cubic metres (tcm) with the United States contributing by far the largest amount to growth of 160 bcm extra gas in that period.
Much of that excess gas will be liquefied into LNG to be exported, making the United States the second largest seller of LNG by 2023 in the world with 101 bcm, pushing Australia into third place with 98 bcm and biting at the heels of Qatar as the top exporter at 105 bcm.
LNG from the three countries will account for 60 percent of global sales of 505 bcm.
Reporting by Sabina Zawadzki; editing by Jason Neely