(Bloomberg) -- China has regained the title of world’s biggest buyer of liquefied natural gas, as a further rebound in deliveries threatens to tighten supply of the heating and power plant fuel.

LNG shipments to China rose 12% last year to nearly 71 million tons, according to ship-tracking data compiled by Bloomberg. High prices and virus restrictions had significantly cut demand in 2022, which helped free up LNG shipments to gas hungry nations elsewhere.

Although China’s LNG deliveries remain below 2021 levels, due in part to cheaper alternatives, the nation is expected to drive global demand growth for the next decade. China’s imports are slated to increase almost 20% to 84 million tons through 2025, and to 136 million tons by 2030, according to Rystad Energy.

A surge in shipments to China before new supply comes online later this decade risks upending the gas market’s careful balance. Europe is far more dependent on the fuel after the loss of Russian pipeline gas, and a jump in Chinese LNG buying — especially this year or next — could threaten a price war between the regions.

Gas makes up just 8.5% of China’s total energy mix, based on data from the Energy Institute, leaving it with plenty of room to grow as it replaces dirtier alternatives like coal. In Japan, by contrast, gas makes up a fifth of the mix, while it’s a third in the US.

China imported 17% of all LNG shipments last year, according to ship-tracking data. For comparison, the entirety of western Europe accounted for 26%. 

The Week’s Diary

(All times Beijing unless noted.)

Thursday, Jan. 4:

  • Caixin’s China services & composite PMIs for December, 09:45

Friday, Jan. 5:

  • China weekly iron ore port stockpiles
  • Shanghai exchange weekly commodities inventory, ~15:30

Saturday, Jan. 6:

  • Nothing major scheduled

Sunday, Jan. 7:

  • China’s foreign reserves for December, including gold

On the Wire

Gazprom’s gas supplies to China via the Power of Siberia pipeline reached 22.7 billion cubic meters last year, above contracted volumes.

China’s thermal coal benchmark, already on a downturn last year, may slide further as milder demand growth makes little headway in clearing the nation’s surplus.

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