Turkmen Nov gas supplies to China slide vs Oct amid winter supply crunch

12/26/2017

BEIJING (Reuters) — China’s monthly natural gas imports from leading supplier Turkmenistan fell in November from the previous month to their lowest since December 2016, leaving Beijing increasing purchases from elsewhere to try to cope with a growing supply crunch.

November imports by pipeline from Turkmenistan were 1.592 MMt, down 7% from October’s 1.71 MMt, customs data showed on Tuesday. That was well below this year’s peak at 2.61 MMt, in April, though still 11% higher than in the same month a year ago.

Overall, China imported 2.5 MMt of natural gas last month, up 27% from the same month a year earlier, led by surging supplies from Uzbekistan, Myanmar and Kazakhstan, according to data released by the General Administration of Customs.

Industry sources with knowledge of China’s gas imports from the central Asian nation estimated supplies from the state-owned Turkmenistan oil and gas company, Turkmengas, were about 20 MMcm–30 MMcm per day short of volumes the Turkmen firm pledged under annual contract with China’s state oil major CNPC.

The people declined to comment because they are not authorized to speak with media.

The reason for the supply cut was not immediately clear, but Chinese oil industry officials blamed it for partly leading to the severe supply Turk, which has spread beyond the hardest hit industrial heartland in northern China. At 20 MMcm a day, the supply cut would be equivalent to roughly 5% of China’s total domestic output.

Turkmengas and the Almaty-based Asian Gas Pipeline company could not be reached for comment.

Turkmenistan supplies nearly 40% of China’s total gas imports via a central Asia-China trunkline and shipments by tankers of super-chilled LNG.

Amid the supply crunch, CNPC, which operates gas production assets at its Amu River project in Turkmenistan, is maximizing output with a daily rate exceeding 38 MMcm, CNPC said last week. CNPC said it will start pumping gas from six new wells at Amu River project from January to raise output by another 2.73 MMcm a day.

“Turkmen supplies, although still posting year-on-year growth, is falling short of the volumes the Turkmen supplier has pledged for the winter months,” said one senior Beijing-based oil official with direct knowledge of the situation.

For the first 11 mos of 2017, imports from Turkmenistan rose 15% on the year to 22.63 MMt, according to the customs data.

China also imports gas from Uzbekistan and Kazakhstan, with flows gathered into the same central Asian trunkline that enters China via the northwest border town of Khorgos.

Supplies from Uzbekistan surged 70% on year last month at 415,725 t and those from Kazakhstan stood 194,262 t.

Reporting by Chen Aizhu and Meng Meng; Editing by Kenneth Maxwell