China buys Russian LNG at record-high levels, steep discounts as West retreats

China’s intake of Russian liquefied natural gas (LNG) surged to an all-time high in October as Western sanctions forced a retreat by other buyers and redirected cargoes, while analysts said that key drivers included discounted prices and Beijing’s shift to non-US suppliers.

Chinese customs data released on Thursday showed that imports from Russia jumped by 76.7 per cent, year on year, to 1.3 million tonnes – the first time monthly volumes from across the northern border topped 1 million tonnes, according to financial data provider Wind.

Russian LNG accounted for 22.5 per cent of China’s total imports, nearly double its 11.4 per cent share from a year prior, while month-on-month shipments rose by 33.1 per cent from September.

The value of last month’s imports increased at a slower pace – up 31.8 per cent, year on year – suggesting that Russia offered reduced prices per unit.

“The custom data seems to reinforce what has been reported already: Russia is likely offering steep discounts to China on LNG shipments,” said Chim Lee, senior analyst at the Economist Intelligence Unit. “The decline in unit prices is less sharp for non-Russian cargoes.”

The spike in China’s buying from Russia came amid heightened sanctions on Russian energy, as the European Union last month announced a phased ban on LNG imports, with short-term contracts ending in six months and long-term ones set to terminate by 2027.

  

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