China imported twice as much liquefied natural gas (LNG) from Russia last month than a year earlier, despite weakened appetite for spot purchases because of high prices.
The world’s second-biggest buyer of the superchilled fuel bought almost 401,000 tons from Russia in February, according to official customs data released Sunday. The increase came as total Chinese LNG imports fell 12% from a year earlier, with Russia’s share rising to 8%.
Chinese buyers have been seeking to diversify their portfolios in line with the nation’s efforts to reduce its dependence on any one source. The drop in total imports came as spot prices were rising because of tight supply in Europe but before they hit a record earlier this month following Russia’s invasion of Ukraine on Feb. 24. Most of the import deals would have been struck before then.
The war in Ukraine has complicated Russia’s role in supplying commodities to China, and led to a lot of deals being put on hold as buyers wait for clearer political signals. It is not yet clear if Chinese importers would be tempted by potential discounts as their international counterparts shun Russian fuel.
Russian LNG imports were still at a premium to top suppliers Australia and Qatar in February, the customs data showed, at almost 5,000 yuan ($786) a ton.
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The high prices saw total LNG imports decline 8.7% year-on-year in the first two months of 2022 as buyers turned to cheaper domestic coal. Demand has also been pressured by the worst coronavirus outbreak in two years and warmer weather.
China’s imports of oil-linked pipeline gas in February increased by 6.9%, down from almost 12% growth last year. There was no breakdown by country but ENN Energy Holdings Ltd., one of the biggest city gas firms, said last week that flows from Russia have increased.