China to be up as ‘Maximum crude oil importing country’, Northeastern Asia to lead ‘Energy Hub’
Ye Jin Soo | jinye@ | 2018-02-13 11:16:36

China has been experiencing a significant increase in three key energy fields, including crude oil, liquefied natural gas (LNG), and renewable energy. It is the analysis that China became the "game changer" that controlled energy import price and Northeast Asia `oil hub` competition in the year when China rose to the top of the world crude oil import and the LNG import second place.

According to the Chinese Academy of Social Sciences and Sinopec`s "China Oil Development Report" obtained by the Korea Institute for Energy Economics on February 12, China imported 4.83 million barrels of oil a day last year, surpassing the US (7.9 million barrels per day) and it became a crude oil importing country.

Looking at China`s crude oil importing countries, Russian crude oil imports were the highest at 1.2 million barrels per day. Like South Korea, the Middle East decreased and the US increased.

Crude oil imports from the Middle East fell to one million barrels a day. The imports of US crude oil, which has been rising in price competitiveness thanks to the increase in shale oil production, will continue to increase, and the annual import volume is expected to exceed 1,000 tons per year.

According to Bloomberg Communications, the China Securities Regulatory Commission said on March 26 that the Shanghai International Energy Trading Center under the Shanghai Futures Exchange plans to launch yuan-denominated crude oil futures.

The release of the crude oil futures traded in the yuan is likely to be a turning point in challenging the hegemony of the US petrodollar (the US dollar) as it facilitates the diversification of oil trading currencies.

It is expected to take more time, but China`s crude oil futures trading, which is the biggest importer of crude oil, is less likely to be successful compared to the Dubai Commodity Exchange (DME) or the Tokyo Commodity Exchange (TOCOM).

Lee Jin-seok, a senior research fellow at the Korea Institute for Energy Economics, stated, "China will become the center of crude oil distribution in Asia, including the spot and logistics at the delivery point of Chinese crude oil futures." Korea, which is in the oil hub competition, it needs to prepare a response strategy for the new changes in relations."

It was also favorably positioned in the LNG hub competition with China taking second place in LNG imports last year. China, which is in the `war on air pollution`, imported a lot of LNG for the second time in the world last year.

Hong Kong`s South China Morning Post (SCMP) reported last year that China`s LNG import volume surpassed Korea`s (36.5 million tons), the world`s second largest LNG importing country, with 37.9 million tons, citing S & P Global Plates data.

Korea`s LNG business, which is strengthening its resource cooperation with Russia, will also face serious challenges.

China is building an energy-honeymoon relationship with Russia, including supplying natural gas from this year`s eastern eastern branch of the Siberian Power project, experts say.

In the renewable energy market, China, which accounted for about half of world PV demand last year, is being strengthened. An industry official said, "China has exerted tremendous power by taking the initiative to cut prices in the international wind market, and as the proportion of renewable energy increases, the voice will be even bigger."

According to the `State of New Energy and Renewable Energy System Operation in 2017` of the National Energy Agency (NEA) obtained by the Korea Energy Economics Institute, renewable energy generation capacity in China has increased by 14% over the previous year to 650 gigawatts (GW) Accounting for 36.6% of the total generation capacity.

The capacity of photovoltaic power generation facilities increased remarkably, and the capacity of new photovoltaic power generation increased 53% from last year to 53GW (33.6GW of power generation, 19.4GW of dispersion type). With the expansion of renewable energies, it is expected that China will accelerate the export of solar-related parts.

By Ye Jin Soo jinye@

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