"We have something like an additional 30 GW of CCGT coming online in China by 2016 - this is named capacity so pretty certain it is happening," Thompson said; but he cautioned "this does not mean 30 GW of opportunity as contracts have been awarded". The equivalent figure for South Korea is 8 GW, according to Wood Mackenzie projections.
As coastal provinces in China increase their LNG import volumes, Wood Mackenzie expects this will result in an increase in the weighted average gas price in markets such as Guangdong, Zhejiang and Jiangsu through the current decade.
However, keen to avoid a rapid increase in gas prices, "the Beijing government is now developing policies supporting initiatives to tap China's large potential of unconventional gas resources to boost domestic supply".
LNG imports unlikely to cover more than 20% of China's gas demand
As for LNG supply to the gas-to-power sector, China has secured long-term contracts for LNG delivery to new and existing regas facilities for over 37 Mtpa (including MOUs) and it is expected that China will continue increasing its LNG import contracting in the future to balance supply and demand in coastal provinces. However, regasified LNG is not expected to cover the lion's share of China's rising gas demand.
"It is not expected that LNG imports in China will account for much greater than 20% of overall gas demand", Thompson said.
At present, China satisfies around 13% of its gas demand through LNG imports and most of these volumes are consumed in close proximity to receiving terminals. "The vast majority of LNG, some 90%, is sold as direct sales to consumers in the power and industrial sectors, with only around 10% being sold through LDCs", he said.
The ratio of regas to power generation as opposed to regas for industrial use differs in Japan, South Korea and China. "Power generation dominates gas use in Japan, accounting for approximately 60% of overall demand. In South Korea this figure is around 50% and in China this figure is around 50-60% at present," Thompson said.