China is swiftly scaling back its liquefied natural gas (LNG) imports, jeopardizing growth projections that have fueled multibillion-dollar investments in global energy projects. Chinese LNG imports are expected to fall this year for the first time since 2022, a significant deviation from earlier forecasts which had predicted record-high deliveries.
The revised outlook indicates that China’s LNG imports will total 74.89 million tons in 2025, a reduction of approximately 11 million tons from previous estimates. This projection is also lower than the amount imported in 2024, following a sharp decline in imports during the first two months of the year, reaching a seven-year low.
Analyst Daniela Li attributed the revision to several factors, including milder weather in the first quarter, increased overland supply from Kazakhstan, the impact of US tariffs on China’s economy, and low natural gas stockpiles in Europe.
This slowdown in demand is offering short-term relief for European buyers, who are competing for the same LNG supplies. However, if the decline in Chinese consumption continues, the market could face a glut later this decade, as more LNG projects come online globally.
The global LNG industry has heavily invested in new export projects, betting on sustained growth in Chinese demand, the world’s largest buyer of LNG. Major companies, including Shell Plc, have placed their long-term profit expectations on trading LNG. However, uncertainty is growing over China’s role in driving global consumption.
Several factors have contributed to China’s reduced demand for LNG. Cheaper energy alternatives such as coal, renewables, and domestically produced or pipeline gas from Russia and Central Asia are becoming more attractive. Additionally, slower economic growth and efforts to reduce energy costs are dampening demand for LNG, which tends to be more expensive due to the high costs of processing and shipping from distant locations like Qatar and the US.
Other firms are also revising their LNG import forecasts for China. ICIS now expects imports to total 81 million tons in 2025, a reduction of 2 million tons from its previous forecast.
Chinese buyers have also been diverting LNG shipments to Europe to capitalize on higher prices, according to Yuanda Wang, an analyst at the consultancy. As a result, Europe has accounted for 35% of the world’s LNG imports this year, a significant increase from the 25% share in 2024, according to Morgan Stanley.
Looking ahead, the Chinese market may see a rebound in the coming months, particularly if a hot summer increases demand for air conditioning and electricity, or reduces hydropower output, Wang noted. Additionally, China’s increasing adoption of LNG as an alternative fuel for trucks could provide further support, although this would require LNG to be priced at a 30% discount to diesel, based on BNEF estimates.
Overall, while China’s natural gas consumption is expected to rise, much of this growth is likely to come from domestic production. In line with its energy security strategy, China’s gas output rose by 6.2% last year to a record high, with major companies like Sinopec increasingly relying on gas to fuel their upstream operations.
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