China's Qatar LNG Imports Fall 97.9% in Second Quarter as PetroChina and Sinopec Seek Hormuz-Free Contracts

Qatar shipped 100,000 metric tons of liquefied natural gas to China in the second quarter of 2026, down 97.9% from 4.7 million metric tons in the same period of 2025. The collapse traces directly to Hormuz Strait disruptions that have severed one of the world's largest bilateral LNG trade flows. Qatar supplied nearly 30% of China's total LNG imports last year, making this a structural supply crisis for Chinese buyers.

The Scale of the Qatari Supply Gap

The second-quarter deficit of approximately 4.6 million metric tons, if sustained, implies an annualized shortfall of roughly 18.4 million tonnes per year for China from Qatari sources alone. China's two largest LNG buyers, PetroChina and Sinopec, are in active talks with exporters outside the Persian Gulf region, according to OilPrice.com reporting dated July 17, 2026. Both companies are seeking contracts of at least ten years, with target deliveries starting before 2030.

China's appetite for US LNG is constrained by trade and tariff policy tensions under President Donald Trump's second term. Buyers in Beijing prefer to keep geopolitical risk separate from supply-route risk. That preference steers new contract negotiations toward Canadian and other non-US, non-Gulf exporters.

PetroChina's Paradox: Buyer and Equity Holder in Canada

PetroChina holds a 15% equity stake in LNG Canada, the liquefaction facility in Kitimat, British Columbia. LNG Canada produced its first cargo in June 2025, with the second processing train beginning operations in November 2025. As of February 2026, the project had delivered 50 cargoes to customers, primarily in Asia.

LNG Canada's Phase 1 capacity of 14 million tonnes per annum gives PetroChina a proportional entitlement of roughly 2.1 million tonnes per year from its existing equity position. Against the 18.4-mtpa annualized Qatari shortfall, PetroChina's LNG Canada stake covers approximately 11% of the gap. Shell holds the largest share at 40%, followed by Malaysia's Petronas at 25%, with Mitsubishi at 15% and Korea Gas at 5%.

LNG Canada carries no Hormuz exposure. The facility exports through British Columbia's coastal port directly to Asian markets via Pacific shipping routes. PetroChina's Canadian equity stake is therefore both a near-term source of non-Hormuz supply and a template for the longer contract structure it is now pursuing with other non-Gulf exporters.

Canada's Position as an Alternative Supplier

Canada's federal government and British Columbia signed a memorandum of understanding in July 2026 focused on strategic energy infrastructure, including LNG projects and trade corridors. The Canadian Association of Petroleum Producers supported the agreement, stating that fast-tracking infrastructure is an effective way to strengthen energy security. PetroChina's 15% stake in LNG Canada places the Chinese buyer at the center of that infrastructure push.

A second phase of LNG Canada, if sanctioned, would expand total capacity to 26 million tonnes per annum from the current 14 mtpa. At full Phase 2 build-out, PetroChina's 15% share would represent 3.9 million tonnes per year, covering 21% of the current annualized Qatari supply shortfall. The consortium has not announced a final investment decision on Phase 2, and regulatory and financing approvals would be required before construction could begin.

Korea Shows the Logistics Alternative

South Korea, which previously routed 61% of crude imports and 54% of naphtha imports through the Strait of Hormuz, completed its 14th crude tanker shipment via the Red Sea as of this week. South Korea's Ministry of Oceans and Fisheries described the Red Sea route as "the most realistic option for the time being, as the Strait of Hormuz has yet to stabilize." That parallel rerouting effort shows how broadly Hormuz disruptions are reshaping Asian energy procurement across both crude oil and LNG markets.