Over the past four years, a big shift has taken place in the market for one of the world’s fastest growing and most important energy sources.

Japan, long the world’s leading consumer, investor and distributor of liquefied natural gas (LNG), has seen its position overtaken by China. In 2021, China became the largest importer of LNG, and this year, according to data from BloombergNEF, China now has the most long-term LNG contracts, is expanding its LNG infrastructure, has a growing presence in markets traditionally dependent on trade with Japan — such as Qatar and Malaysia — and is even increasing imports from the United States and Australia.

For countries like Malaysia, Qatar and Australia, China’s growth has been responsible for nearly all of their increase in LNG exports over the past five to seven years. And China’s role is expected to increase as the country expands its LNG port infrastructure and carrier fleet, putting it in direct competition with Japan’s major LNG importers, including utilities such as Jera and Osaka Gas and trading houses Mitsui, Mitsubishi Corp., Marubeni, Sumitomo and Itochu.

“We still believe that more LNG growth is coming from China,” said Ziyue Daniela Li, a senior associate with BloombergNEF’s Asia-Pacific gas team.

The potential impacts are varied.

Japanese companies, long accustomed to being the sole bidder for long-term contracts, could see themselves outbid by China.