Liquefied Natural Gas (LNG) imports to China have grown by 25% annually over the last four years according to the latest analysis from Thomson Reuters Point Carbon.

In addition, the last two months (December 2013 and January 2014) reveal a dramatic increase in imports, up 80% from previous months. Furthermore, it looks like China will be a top LNG importer by 2018-20, with volumes close to the current import levels for Japan, which, as the world’s largest LNG consumer, had LNG imports of 118bcm in terms of natural gas in 2013.

Thomson Reuters Point Carbon has developed three forecasts for the growth of China LNG ranging from 52 to 110bcm for the year 2018. All three lead to the conclusion that China will contribute significantly to tight supply/demand balances in the global LNG market over the years to come.

Several new LNG import terminals are under construction and even more are planned and approved. Adding these to the existing capacity means Thomson Reuters Point Carbon expects LNG import capacity to reach about 100bcm /year by 2018 or even before.

Natural gas production in China has also grown significantly over the last few years, from 28bcm in 2000 to 109bcm in 2012. In volume terms China is now at parity with Norway, Western Europe’s largest gas producer.

Import of gas started in 2006, growing to 52bcm in 2013 with an approximately 50/50 share between LNG and piped gas. Turkmenistan supplies most of its pipeline gas, but there are ongoing discussions with Gazprom / Russia on a large volume contract due to start in 2018. In 2013 LNG imported 24.7bcm of natural gas, almost double the 2010 level of 12.7bcm.

The current LNG imports are backed by long term contracts with several LNG producers. New long term contracts have been established with producers from Australia and Papua New Guinea, to start from 2015 and 2016. Based on these agreements, China has secured a base LNG supply of 44bcm per year from 2016, although LNG import growth into China may taper off if LNG turns out to be too expensive for segments of the Chinese gas market.