The gas and LNG sector in China emerged from the shadows of the Covid-19 pandemic and is witnessing rapid growth due to robust demand from the residential and industrial sectors, economic rebound, expansion of gas and LNG infrastructure, and government policies directed towards reducing carbon emissions.

This current scenario mitigates the concerns expressed by the majority of the respondents in a GlobalData poll who felt that slower growth of gas demand can be a major deterrent for China’s gas and LNG sector in 2021.

According to the poll, 25% of the respondents opined that the growing consumption of coal for power generation is another major concern for the gas and LNG sector in the country. Despite the country’s efforts to reduce coal in the primary energy mix and become a net-zero emitter by 2060, it continues to lead globally on newly commissioned coal-fired power projects due to abundant domestic coal reserves and relatively low price of coal when compared to gas.

The survey results showed that 21% of the respondents believed LNG import projects delays, while 19% opined capex cuts by LNG developers to be the biggest concern for the LNG sector in 2021. Several major players slashed their capex, in the previous year, as they adjusted their operating strategies owing to the demand plunge and price surge during the pandemic. However, economic rebound coupled with growing demand for gas and LNG is encouraging major players to readjust their strategies to align with the current scenario. For instance, in March 2021, Sinopec announced plans to increase its capital expenditure by 23.8%. Among other things, it is focusing on expanding its LNG capacity by constructing LNG terminals in coastal areas.