(Bloomberg) — Gas is in such hot demand in China right now it’s allowing a quirky market to flourish: transporting the fuel on trucks.
Call them pipelines on wheels. The country’s top suppliers are loading liquefied natural gas onto tanker trucks and delivering it to users to make up for insufficient pipeline coverage inland. The method is so effective ENN Group is using it as a primary way to move LNG from its new terminal.
This new kind of gas market has thrived in China over the past few years as the government’s blue-sky policies boosted demand for the cleaner-burning fuel faster than pipelines can be built to support them. It’s also unregulated, allowing nimble sellers to benefit from rising prices during peak consumption seasons, while the city-gate benchmark remains at government-set rates.
“We haven’t seen this kind of volume in trucked LNG anywhere else in the world” said Xizhou Zhou, head of China energy research for IHS Markit. “This market in China is a reflection of the market distortion caused by regulated city-gate prices, increasing supply and demand, and price volatility.”