China Buys Three Spot Nigerian LNG Cargoes to Meet Local Demand

China, the world's second-biggest energy user, bought three cargoes of Nigerian liquefied natural gas because domestic demand has outpaced contractual supplies from Australia.

China's only LNG import terminal, owned by China National Offshore Oil Corp. and BP Plc, received two Nigerian cargoes this month and may get another next week, a terminal official said, asking not to be named because of company rules. Royal Dutch Shell Plc's Galea will deliver a cargo to China on Oct. 5, according to transmissions from the ship captured by AISLive on Bloomberg. Shell is a partner in Nigeria LNG Ltd.

Imports climbed after China, the world's biggest emitter of greenhouse gases, turned to the cleaner-burning fuel to cut reliance on oil and coal. The terminal in southern Guangdong province has imported four spot cargoes for immediate delivery from Oman and Algeria between April and August to supplement long-term supplies from Australia's North West Shelf.

"There is great demand for the clean fuel here if the price is affordable," Rao Xiaozhu, vice chairman of Guangdong Gas Association, said by telephone, "Now most LNG is feeding power plants and city residents are all awaiting the fuel." The Guangdong Dapeng LNG Co. terminal supplies Guangdong, the nation's largest energy-consuming market.

China National will buy more LNG cargoes in the spot market to meet demand from power plants and city gas users, Ye Yishu, marketing general manager at the Beijing-based company's LNG trading and shipping unit, said June 27. The cargoes range between 55,000 and 60,000 metric tons.

Australian Supplies

The $900 million Guangdong Dapeng terminal gets most of its LNG from Australia's North West Shelf venture, which has a 25-year contract to supply 3.7 million tons a year. The venture is operated by Woodside Petroleum Ltd. and is one-sixth owned by BP Plc.

Prices for individual spot cargoes for immediate delivery are more than double the cost of long-term shipments. China bought its first spot LNG cargo from Oman in April at $435 a ton, or $8.30 per million British thermal units. In May, the country paid the North West Shelf Venture $164 a ton, or $3.15 a million British thermal units, for supplies under a term contract, customs data show.

China's share of Asia Pacific's LNG imports may more than double by 2030, Yonghun Jung, vice president of the Asia Pacific Energy Research Center, an affiliate of Japan's Institute of Energy Economics, said June 26. China may import 52 million tons of the fuel a year by 2030, accounting for 12 percent of the region's LNG shipments, he said then.