China races to restore gas supplies ahead of icy blast, holiday

China is pulling in ships from all over to avoid a natural gas supply squeeze ahead of another cold snap and as the country prepares for Spring Festival celebrations.

Fuel demand in January and February typically slows as temperatures improve compared with the busiest month, December, but data suggests this year could buck the trend.

Another cold wave is about to hit North Asia, and China’s Spring Festival takes place later than usual this year in mid-February.

To ensure supplies before the longest holiday in the Chinese calendar, some 60 ships carrying more than 4 million tons of liquefied natural gas (LNG) are on their way to China this month, the third highest total behind December’s 5.1 million and November’s 4.36 million tons, data from Thomson Reuters Eikon showed.

The shipments are coming from unusual origins – Equatorial Guinea and Angola in Africa, Peru in South America, and Trinidad and Tobago in the Caribbean – and several are also coming from the US.

“The Chinese have bought loads of short-term delivery cargoes to meet an expected spike in demand,” the head of LNG trading at a major fuel merchant based in Singapore said.

Domestic producers are also churning out more gas. China’s December gas output was the highest since at least 2014, with state energy majors boosting operations.

With temperatures in Beijing set to drop as low as -15 C this week, heating demand will soar and authorities want to avoid a repeat of December’s chaos, which saw serious supply shortages.

“This year, we have a surge in residential and commercial demand,” said Huang Miaoru of energy consultancy Wood Mackenzie.

The crisis eased over the past month after the government ordered big gas users like fertilizer makers to suspend operations to move supplies north, and reversed a ban on coal heating for some cities.