China, the world's second-largest economy, would be better off scouting and buying gas imports from Central Asia, primarily Turkmenistan, to meet near-term demand.

This, as Wood Mackenzie Ltd. slashed forecast for China's liquefied natural gas (LNG) demand caused by a weakening appetite for the fuel spurred by delays in the implementation of structural gas price reforms in China.

Analysts from Wood MacKenzie's China Gas Service said on Thursday that China's major LNG buyers have continued to complain about the expensive prices of LNG, but forgot to consider that gas from Central Asia can be brought to China to address near-term demand.

China is projected to use 31 million metric tonnes a year of LNG by 2015, a cut from an earlier forecast of 33 million tonnes, the London-based consulting firm said in a statement. Overall gas demand remains high and the nation may need to seek alternative supply options over the next 2-4 years, it said.

Piped gas imports from Turkmenistan offer buyers entree to a world-class reserve base that is more price-competitive than all China's existing LNG supply contracts, Wood Mackenzie said, adding China even has the pipeline frame to increase imports from Central Asia in the near term.

China's WE2 pipeline is scheduled to be fully operational by end-2011. This early, construction plans for a WE3 line is already in place. All infrastructures will be critical in achieving China's import needs from Central Asia. At least another 10 billion cubic metres (bcm) per annum of capacity already exists on the WE2 pipeline.

According to Wood Mackenzie, the current border price of Turkmen gas is no more than $8.50/MMBtu while the cost of transporting to Shanghai is at $4.50/MMBtu.

LNG imports by the world's second-largest economic driver grew to a record high 1.18 million tons in July, according to the General Administration of Customs obtained by Bloomberg. In September, purchases of the fuel were 1.15 million tonnes.

https://www.ibtimes.com/articles/245942/20111109/spot-lng-freight-rates-october.htm

https://www.ibtimes.com/articles/244268/20111107/asian-lng-prices-nary-movement-japan-south.htm