China's LNG Appetite Fades Amid Domestic Energy Push

China's growing reliance on domestic and pipeline gas has weakened its appetite for liquefied natural gas (LNG), potentially undermining future projects that depend on long-term import needs from Asia and Europe.

The Iran war has triggered the second global LNG supply shock in four years, following Russia's invasion of Ukraine in 2022. This has reinforced China's drive to prioritize domestic and renewable energy over imported LNG, shrinking its share of the fuel mix.

Analysts at S&P have cut their projections for China's LNG demand growth in the early 2030s by between 14 million and 22 million tons, citing heightened energy security concerns. JPMorgan has also reduced its forecasts, expecting China to rely less on imported LNG due to its focus on self-sufficiency.

Upcoming new capacity may be affected, with around 217 million tons of new export capacity expected by 2030, a more than 40% rise from current levels. However, most US projects are likely to proceed despite the weaker outlook for China's LNG demand, as several Asian and European countries remain import-dependent.