China: the upcoming global gas giant

摘要

The global natural gas market has been unusual among commodities in that it has not had a China story over the last ten years. The market has seen significant volatility, due in part to its shallow liquidity pool and some big fundamental swings - Qatari LNG trains and post-Fukushima Japan being the stand-out ones. But the fundamental swings have not been about China - that is, until now. At the start of this winter, the biggest single question was how cold would it get in China and how big would the demand side response be, given China's rush to get 9.2 Mtpa of LNG regas capacity operational in Q4 13. With all of that new capacity on-line, LNG spot cargoes shot above the $18/MMBtu level at the start of the heating season and have simply not come down. Even after a mild December and January, these spot prices are staying at these advanced levels.