London — Global LNG trade grew 10.3% in 2017 to 393.4 Bcm of gas equivalent, thefastest growth since 2010, BP said in its latest annual statisticalreview published Wednesday.
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* Chinese imports accounted for 50% of global growth
* LNG glut 'of sorts' in recent years: chief economist Dale
* LNG supply growth leading to more price convergence
Strong production growth -- aided by startup of new LNG trains inAustralia and the US -- was met by equally strong demand growth from China,which accounted for almost half of the global expansion.
Chinese LNG imports totaled 52.6 Bcm of gas equivalent last year, up 47%on the 35.9 Bcm it bought in 2016.
Qatar remained the main global LNG supplier, with exports totaling 103.4Bcm of gas equivalent, while the US saw its exports soar to 17.4 Bcm lastyear from just 4.3 Bcm in 2016 -- which was the first year of LNG suppliesfrom the lower 48.
Australia also saw its exports rise strongly by 28% to 75.9 Bcm lastyear, making it the world's second biggest LNG supplier by some distance.
BP chief economist Spencer Dale said that while market observers hadpredicted an LNG supply "glut" given the wave of new supply projects thatcame online in the past few years, the result instead has been periods ofunsustainably low prices rather than a build-up of idle capacity.
"So there has in fact been an LNG glut of sorts in recent years, but thishas resulted in periods of unsustainably low prices rather than idle LNGcapacity," Dale said.
The apparent absence of a major supply glut, he said, also reflects thefact that actual LNG deliveries have come on stream less quickly thanoriginally planned due to a variety of technical issues.
Dale said the global gas market was becoming increasingly integratedthrough the greater mobility of LNG exports.
He said the ability of LNG to alter its destination in response to pricesignals -- in a way that pipeline exports cannot -- was likely to leadgas markets around the world becoming increasingly integrated, with regionalgas prices increasingly moving in unison.
"This increasing integration is also apparent in a convergence of thevolatility of gas prices in different markets," Dale said.
"As markets open up, shocks in one region are increasingly shared acrossthe world, leading to more similar patterns of variability across markets."
--Stuart Elliott, Stuart.Elliott@spglobal.com
--Edited by Jeremy Lovell, email@example.com