China should start buying more pipelined gas from Central Asia instead of increasing its imports of LNG, says a report out today.

The study by global energy analysts Wood Mackenzie says the Central Asia region, particularly Turkmenistan, is a much better option to meet near-term demand because delays in implementing structural gas price reforms in China have weakened buyers’ appetite for more costly LNG.  

Wood Mackenzie’s director of China gas research, Gavin Thompson, said: “Although the strategic and commercial logic in contracting significant additional volumes of piped gas from Central Asia may not be the most obvious option to China, it is our view that this is a credible alternative to LNG imports.”

He added that while piped imports from Turkmenistan were not cheap, it had three main advantages over LNG imports: access to a world-class uncontracted reserve base competitive against LNG; it is potentially more price competitive than all existing LNG supply contracts in China; and China has the infrastructure to increase Central Asia imports in the near term.