Reuters: China LNG demand a bright spot as producers weigh major investments

China's imports of liquefied natural gas (LNG) are growing at a record pace as it aims to use cleaner fuels to cut smog in big cities, creating a powerful new source of demand that has the potential to reshape the market for the super-chilled gas.

Rising Chinese demand gives LNG producers such as Chevron , Royal Dutch Shell, ExxonMobil and Total a crucial new sales avenue as they weigh whether to go ahead with $180 billion in investments into potential new or expanded LNG projects.

Producers face rising costs in Australia - where many LNG projects are based - and uncertainty about longer-term demand in Japan and South Korea, the world's top two buyers of the fuel.

The Chinese, though, are spending billions of dollars in buying LNG-related interests overseas and in building new import terminals. LNG imports are up 35 percent to 5.62 million tonnes in the first quarter against the year-ago period, according to customs data.

And imports are set to rise by a third this year, according to research firm Energy Aspects. They grew 25 percent annually over the last four years, Thomson Reuters Point Carbon says.

"Producers are certainly looking at China, because that's the only market right now that will offer 2-3 million tonne deals," said Gavin Thompson, head of Asia Pacific gas and power at consultancy Wood Mackenzie. MORE