China LNG Prices Soar 6.7% on Tighter Supply and Seasonal Demand

China's liquefied natural gas (LNG) market has seen a significant increase in prices, rising by 6.7% in early September due to tighter supply and recovering seasonal demand.

The country's LNG supply fell 8.03% month on month to 7.61 million tonnes in August, while imports declined 10.67% to 5.18 million tonnes. Meanwhile, consumption increased 5.75% to 3.24 million tonnes, indicating that available volumes were being absorbed more quickly.

The rebound in demand was driven by industrial users and gas distributors preparing for higher autumn and winter requirements. However, demand remained sensitive to elevated spot costs, with recent disruptions to Middle Eastern gas flows pushing Asian spot prices sharply higher.

China Gas has signed a 20-year agreement with Venture Global to purchase 0.5 million tonnes per year of U.S. LNG starting in 2030, demonstrating the country's effort to diversify its long-term sourcing.