China has overtaken Japan as the world’s largest importer of liquefied natural gas (LNG), reshaping the energy landscape in Asia and threatening Japan’s long-held position in the market.

Since 2021, China has secured the most long-term LNG contracts, expanded its import terminals, and boosted imports from key exporters like Qatar, Malaysia, the U.S., and Australia.

This growth puts China in direct competition with Japanese giants such as Jera, Osaka Gas, and major trading houses Mitsui and Mitsubishi.“We still believe that more LNG growth is coming from China,” said Ziyue Daniela Li, senior associate at BloombergNEF.Japan, which led global LNG imports for over five decades, faces new challenges.

With domestic LNG demand declining due to energy efficiency and renewable growth, Japanese firms now hold more LNG than their market needs. To offset this, Japan is exporting LNG technology and infrastructure to Southeast Asia, promoting LNG as a cleaner alternative to coal.“

Japan is aggressively promoting the expansion of LNG-fired power in Southeast Asia,” said Evan Gach of the Tokyo-based nonprofit Kiko Network, warning this push could lead to “environmental destruction and increased greenhouse gas emissions.”

Energy experts emphasize LNG’s complex role in the energy transition. “It’s a historic bet on a dangerous fossil fuel,” said Wesley Morgan of UNSW Sydney.

“We can shift straight from coal to wind, solar and batteries without the need for LNG.”Despite China’s rapid rise, Japan is expected to maintain LNG as a core part of its energy mix. “Japan has to plan its energy needs conservatively,” noted Yuriy Humber, founder of Japan NRG.

“LNG will not lose its role in Japan’s future energy picture.”As China builds more LNG terminals and fleets — poised to surpass Japan by 2030 — the rivalry promises to reshape energy security and trade in the Asia-Pacific region for years to come.