China Key Destination for Rising U.S. Energy Exports

In recent years, as its domestic energy consumption has grown, China has become a more significant destination for U.S. energy exports, writes the Energy Information Administration (EIA). In particular, China has been among the largest importers of U.S. crude oil, propane, and liquefied natural gas.

In 2017, more U.S. crude oil was sent to China than any other destination except Canada. China received more U.S. crude in 2017 than the third- and fourth-largest importers, the United Kingdom and the Netherlands, combined. China has been the world’s largest net importer of total petroleum and other liquid fuels since 2013 and surpassed the U.S. as the world’s largest gross crude oil importer in 2017.

Based on data through April of this year, China’s imports of U.S. crude oil have continued to rise, averaging 330,000 bbld. In February, China received more U.S. crude oil than any other destination. Nearly all of those imports were sent from the Gulf Coast region.

China was the third-largest destination for U.S. propane exports last year, behind only Japan and Mexico. Overall, about half of U.S. propane exports went to Asian countries in 2017, displacing supplies from Middle Eastern countries and some regional production of propane.

Propane is used in many Asian nations as a feedstock for producing ethylene and propylene, building blocks for chemical and plastic manufacturing. So far this year, China has remained the third-largest destination for U.S. propane exports, receiving 92,000 bbld through April, or 31% less than U.S. exports to China in the first four months of 2017.

As U.S. liquefaction export facilities have come online, the U.S. has exported greater volumes of liquefied natural gas, or LNG, averaging 1.9 MMcfd in 2017. Of that amount, 15% went to China, making it the thirdlargest importer of U.S. LNG behind Mexico and South Korea. The next-largest importer, Japan, received about half as much U.S. LNG in 2017 as China. China surpassed South Korea last year to become the second-largest importer of LNG in the world. Based on data through April 2018, China’s imports of U.S. LNG have averaged 0.4 Bcfd, behind only South Korea and Mexico. The next largest importer of U.S. LNG, India, has received less than half as much U.S. LNG as China so far this year.

China also receives other petroleum exports from the U.S., such as petroleum coke and normal butane. Although China has large domestic supplies of coal, the country also imports some coal from the U.S. In 2017, China received 3.2 million short tons of U.S. coal, or 3% of total U.S. coal exports, making it the 10th-largest destination for U.S. coal exports. About 90% of China’s 2017 imports of U.S. coal was metallurgical coal used in the production of steel.

(SOURCE: The Weekly Propane Newsletter, July 16, 2018. Subscribe for your once- or twice-weekly subscription at BPNews.com)