Chairman and CEO Fu Chengyu told a Cambridge Energy Research Associates conference in Houston that the LNG market in China was developing very quickly and soon the country would be importing about 30 million tons of LNG each year.
China may be keen to increase its LNG imports but it has not been signing any new contracts lately and has been using on-again, off-again negotiating tactics over Gorgon LNG.
According to a recent study by North American energy specialist Tristone Capital, the world has the capacity to 're-gassify' 27.3 billion cubic feet of gas a day – but only has the infrastructure to produce 20.3bcf of liquefied natural gas (LNG) a day.
Australian Resources Minister Ian Macfarlane warned recently that the world energy market was moving rapidly, and buyers that did not lock in LNG contracts soon could miss out.
China has planned up to 10 new LNG import terminals and has already started building some of these. So it must acquire some gas from somewhere.
But China seems unwilling to pay the going rate for LNG. One alternative would be to become a major partner in new LNG projects from their inception in developing countries keen to attract foreign investment.
Papua New Guinea Prime Minister Michael Somare recently said he had received a proposal from CNOOC to develop an LNG on the country’s north coast.
China and PNG have also agreed to assess the viability of a gas pipeline to the north coast.
It could be a great development for PNG, but China must surely also look elsewhere. It seems unlikely that PNG could supply all of China's needs.