At least two relatively small importers of liquefied natural gas (LNG) in China have been told to halt new imports from Australia, according to Chinese media reports. Earlier, China’s National Development and Reform Commission decided to indefinitely suspend all activities under the China-Australia Strategic Economic Dialogue, which was co-led by the National Development and Reform Commission of China and the relevant department of the Australian federal government.
China has already banned imports of coal, sugar, lobster, copper, timber, wine from Australia, and some other Australian products. After that, raw materials such as iron ore and natural gas, which are heavily traded between the two countries, will also be hit. China is Australia’s largest trading partner, and Australia is China’s largest supplier of liquefied natural gas.
Statistics show that since 2015, Australia’s LNG exports to China have surpassed Qatar for the first time, becoming the largest source of LNG imports to China. According to China’s General Administration of Customs, China imported about 29 million tons of liquefied natural gas from Australia in 2020, accounting for about 46 percent of its total imports. Analysts believe that natural gas as the lowest carbon in fossil fuels, clean fuels, in the promotion of “carbon peak” and “carbon neutral” in China, is the best substitute of other fossil fuels, is also a bridge to make the transition to non-fossil energy development, which means that the future of natural gas consumption in China is likely to continue to maintain rapid growth.
Against this backdrop, China’s domestic LNG producers are in the spotlight, including Hongtong and ENN.
The main business of Hongtong Gas (605169) is the production, processing, storage, transportation and sales of LNG and CNG, as well as the sales of natural gas for residential, commercial and industrial use. Its annual LNG capacity is 120,000 tons.
ENN (600803) currently operates two coal-bed methane (CBM) LNG plants with an annual LNG capacity of about 100,000 tons.
Source: Financial World