As its import needs peak, China is positioned to transition from a simple demand center to a sophisticated global LNG trader. Its vast storage capacity, extensive regasification infrastructure, and diverse contract portfolio will provide the flexibility and optionality to resell cargoes and influence global energy flows.
Massive expansion of Russian pipeline capacity, including the Power of Siberia 2, will increase gas flows to China from 38 BCM in 2025 to 106 BCM by 2035. This dramatic increase in secure overland supply is the primary reason why China's demand for seaborne LNG is forecast to peak and then plateau around 2032.
China's forthcoming economic plan is expected to introduce more stringent environmental rules, potentially moving from GDP intensity-based targets (emissions per unit of GDP) to an absolute cap on total emissions. This policy change would directly limit the consumption of all fossil fuels, including natural gas.
Contrary to common assumptions, China's future natural gas demand growth will be led by the industrial sector, not power generation. Policy support for manufacturing and lower global LNG prices are expected to drive significant coal-to-gas switching in industrial processes, while gas in the power sector remains a secondary source to balance renewables.