China Shifts Focus to African LNG Amid Decreasing Australian Imports

(3 Minutes Read)

China is revising its energy strategy by increasingly turning to Liquefied Natural Gas (LNG) imports from Africa to diversify its supply as its imports from Australia decrease. The South China Morning Post (SCMP) reports that China is sourcing LNG from countries like Mozambique, Algeria, Ghana, and Egypt, indicating a significant shift in its energy sourcing strategy.

While Australia still supplies about one-third of China’s total LNG imports, Beijing is working to lessen its dependence on Australian gas. This transition is part of a broader strategy to diversify its resource suppliers, with increased imports also coming from Qatar, Russia, Malaysia, and the United States. Notably, Africa’s contribution to China’s LNG imports is rapidly growing, particularly from Nigeria, Mozambique, Algeria, and Egypt.

China’s investments in Mozambique’s LNG sector exemplify this growing reliance on African gas. The China National Petroleum Corporation (CNPC) has a 20% stake in the USD 30 billion Rovuma LNG project, which aims to produce 18 million tonnes of LNG per year. Additionally, CNPC is a key player in the Coral Floating Liquefied Natural Gas project, which exported its first cargo in 2022.

Corporate lawyer Kai Xue in Beijing noted that China’s focus on Mozambique’s LNG projects signifies a broader strategic shift, particularly amid ongoing trade tensions with Australia. This mirrors similar efforts in Guinea’s iron ore sector and Mongolia’s coking coal projects to secure alternative resources.

In addition to Mozambique, China is expanding its LNG investments throughout Africa, solidifying energy partnerships across the continent:

• In Congo-Brazzaville, Chinese firm Wing Wah is developing the $2 billion Banga Kayo block, aimed at producing one million cubic meters of gas per day from previously flared gas.
• In Algeria, Sinopec and the China National Nuclear Corporation have partnered with Sonatrach to complete a 150,000-cubic-meter LNG storage tank.
• In Egypt and Ghana, China is seeking further LNG collaborations and long-term supply agreements.

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https://trendsnafrica.com/australian-gas-explorer-to-develop-sas-lng-project/

David Shinn, an expert on China-Africa relations at George Washington University, pointed out that while China’s crude oil imports from Africa are declining, LNG imports are rising sharply, underscoring the continent’s increasing significance in China’s energy security. As China ramps up its LNG investments across Africa, countries like Mozambique, Algeria, Nigeria, and Egypt are becoming essential partners, helping to mitigate geopolitical risks and ensure supply stability. This strategic shift not only enhances China-Africa economic ties but also positions Africa as a pivotal player in the global LNG market.