China's LNG Appetite Fades Amid Shift to Domestic Energy Sources

China's appetite for liquefied natural gas (LNG) is waning, and this shift in energy mix could weaken the growth of global LNG demand. The country was once seen as a key driver of future demand growth, justifying billions of dollars in export infrastructure investment from the U.S. Gulf Coast to Qatar.

However, China's drive to prioritize domestic and pipeline gas, along with renewable energy, has relegated imported LNG to a shrinking share of its fuel mix. The Iran war has triggered a second global LNG supply shock in four years, reinforcing China's focus on self-sufficiency.

S&P analyst Megan Jenkins noted that even after Persian Gulf LNG supply is restored, 'heightened energy security concerns' will result in a more conservative approach to LNG imports. This will drive efforts to boost energy self-sufficiency, leading to lower LNG demand compared with pre-war expectations.