Trucks fill Chinese gaps in LNG market

A report emailed from consultant group Wood Mackenzie found the Chinese market is looking at trucking to make up for the lack of pipeline coverage inland.

"We expect China's gas demand to reach 9.3 trillion cubic feet this year," Miaoru Huang, a senior manager at Wood Mackenzie, said in the report. "Similar to 2017, 12 percent of demand will be supported by LNG trucking."

The International Monetary Fund predicts growth in Chinese gross domestic product at 6.6 percent for the year. Economic planners in Beijing are focused on qualitative growth as GDP stabilizes toward 6.4 percent from 2019.

China, meanwhile, is shifting to a low-carbon economy and the super-cooled form of natural gas could be used as a bridge fuel. China's central bank last week opted to expand lending tools to support green economic sectors.

Wood Mackenzie estimates that China has the largest LNG trucking market in the world. As the economy comes to rely more on natural gas, trucked LNG can fill a gap for residential, commercial and industrial consumers outside pipeline coverage. The consultant group said trucking is a viable option as there is "not enough time nor is it economical to build or expand pipelines" to uncovered areas.

"The flexibility of LNG trucking alleviates China's lack of pipeline coverage, storage and regas capacity," Wood Mackenzie's report read.

For imports, China has looked to Australia, Qatar and the United States as sources of LNG. In an effort to narrow the bilateral trade balance, the U.S. government in particular has lobbied for more Chinese purchases of its natural gas.

Energy was on the agenda during weekend talks between Chinese officials and representatives from the U.S. Department of Commerce. A statement from Chinese Vice Premier Liu He, published in the official Xinhua News Agency, indicated the talks were amicable, but inconclusive.

"To implement the consensus reached in Washington, the two sides have had good communication in various areas such as agriculture and energy, and have made positive and concrete progress while relevant details are yet to be confirmed by both sides," the statement read.