China is – like its Asian peers – a flexibility taker. This means that they cannot accept even deliveries of LNG all year through, they don’t have nearly enough storage for that. But China is also quite big as a buyer which means there are two ways to deal with this. Either overbuying and trying to get rid of the excess on the spot market. Or under-buy and buy at premium prices in the spot market when it needs it. Or a combination of both. One thing is safe to say, China needs a flexibility mechanism either to get rid of over-contracted volumes or to get what it needs when it needs it. And the only market on Earth that can really lend a hand here is North Western Europe as it can take LNG when nobody needs it and release LNG when its scarce. Time to think up some partnerships I would say.
China imported 4.35 million tonnes of liquefied natural gas (LNG) in February, down from the previous month’s record level, the General Administration of Customs said on Saturday, as demand eased towards the end of the peak winter heating season.