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China's Gas Storage Expansion to Create Structural LNG Demand, JP Morgan Says

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China's efforts to expand its natural gas storage capacity are set to create strong structural demand for global LNG, according to J.P. Morgan Chase (JPM) analysts.

Speaking at the bank's LNG Speakers Series webinar on Thursday, Parsley Ong, J.P. Morgan's head of Asia Energy and Chemicals Equity Research, said Beijing's push to strengthen energy security will require continued injections into newly built storage facilities, supporting gas demand even as broader consumption growth slows.

"There is one part of demand that will be there regardless of what the price is, and it's a mid-to-long term structural trend. And that is demand for gas storage," she said.

Ong noted that China had already increased storage capacity under its 14th five-year plan, with current storage capacity amounting to about 8% of its 2025 annual gas consumption.

The country now plans to raise this ratio to 13% by 2030, which, according to Ong, implies an annual incremental gas demand of between 3.5 billion and 5.0 billion cubic meters to fill the additional storage.

Meanwhile, JPMorgan expects China's overall natural gas demand growth to slow to just 1% in 2026, down significantly from earlier forecasts, amid weaker economic activity and fuel substitution following disruptions caused by the Middle East conflict.

Nonetheless, Ong expects the expansion of strategic storage to turn the tide for China's natural gas import momentum, which is expected to decline by 10.8% this year.

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