[By Crowley]
Crowley, a U.S.-owned shipping and logistics company, alongside Puerto Rico Governor Jenniffer González-Colón, celebrated the successful operation of American Energy, during an event Wednesday, June 18 at Crowley’s LNG Loading Terminal in Peñuelas. American Energy is the first U.S.-flagged liquefied natural gas (LNG) carrier to deliver U.S.-sourced LNG to Puerto Rico.
The Crowley-owned, 900-foot-long (274 meters) vessel began service in March 2025. At full capacity, American Energy is capable of transporting up to 34.4 million gallons (130,400 cubic meters) of LNG per voyage. Operating under a multi-year agreement with Naturgy, American Energy provides regular service between the U.S. Gulf Coast and EcoEléctrica’s LNG facility in Peñuelas, ensuring a reliable, efficient energy supply of cleaner-burning LNG to support the island’s growing power demands.
“American Energy demonstrates the power of partnership,” said Tom Crowley, chairman and CEO of Crowley Corporation. “Together, we are building upon a shared commitment to dependable, sustainable energy solutions for Puerto Rico. We are not only enhancing the resilience of the island’s power infrastructure but also supporting its economic growth and ensuring long-term energy security for the communities and businesses that rely on it every day.”
"The entry into service of the American Energy marks a significant step in our efforts to increase energy supply sources, marking the first time that an American-flagged tanker will transport liquefied natural gas from the mainland to Puerto Rico. This represents a major step forward in fuel supply reliability to stabilize our electric grid, which will greatly benefit our population," said Governor Jenniffer González-Colón, who congratulated the crew of the American Energy, especially the Puerto Rican mariners working aboard the vessel.
"Just in time for the start of the peak energy consumption season, this natural gas supply route from U.S. sources expands our options for stabilizing our electric grid, as we work to provide our residents and businesses with a more reliable and consistent source of power generation."
At the event, Crowley crew members and leaders were joined by Josean González Febres, Mayor of Peñuelas; Josue Colon, Puerto Rico Energy Czar and Executive Director of the Puerto Rico Public-Private Partnership Authority; Mary Carmen Zapata, executive director, Puerto Rico Electric Power Authority; Norberto Negrón, executive director, Puerto Rico Ports Authority; and Carlos RÃos, deputy secretary, Puerto Rico Economic Development & Commerce Department.
American Energy builds on Crowley’s 70-plus years of commitment to Puerto Rico, where Crowley also operates the full-service Isla Grande cargo terminal in San Juan, supporting its container and roll-on/roll-off vessels, including two LNG-fueled ships and logistics services. Crowley annually delivers more than 94 million gallons of LNG through its LNG Loading Terminal in Peñuelas as well as provides ocean delivery and land transportation using ISO tank containers to meet the island’s energy needs. Additionally, as part of Crowley’s broader energy initiatives, the company is advancing innovative LNG microgrids that bolster energy resilience for businesses and communities, offer lower emissions and drive long-term growth.
The products and services herein described in this press release are not endorsed by The Maritime Executive.
[By Yu Aiqun and Maggie Zheng]
In many ways, China’s energy sector follows the path of “slowly, then suddenly all at once.”
More gas-fired power capacity was installed there in 2024 than in any other country, according to Global Energy Monitor (GEM). The addition of 19.5 gigawatts (GW) of gas power, although far less than of coal (30.5 GW) or renewables (355 GW), is more than the new capacity of the next seven countries combined.
The United States continues to operate the largest overall fleet of gas power plants (556 GW), but China is catching up quickly (152.8 GW).
The industry tries to promote gas power as a clean alternative to coal and a helpful partner to renewable energy. However, gas has struggled to find a solid footing in these roles due to high costs and supply uncertainties. As it is difficult to imagine these obstacles disappearing, gas power is an unnecessary detour in China’s energy transition.
An ambiguous role in the energy transition
Unlike many other countries, gas plays a minor role in China’s power mix. It accounts for just 3.2% of total generation, compared to 43% in the United States. As the Chinese government pursues its “dual carbon goals” (to peak carbon emissions before 2030 and reach carbon neutrality before 2060), the positioning of gas power in a supporting role is both unclear and sometimes contradictory.
Gas is considered a “clean” energy in China, where more than half of its electricity is generated by coal. However, gas is a fossil fuel that emits greenhouse gases during its extraction, transportation and combustion.
Gas does have some advantages over coal power generation. It is more efficient, generates fewer carbon emissions per kilowatt-hour (if methane leakage is not factored in), and its power stations require half the land. But gas power is unable to meaningfully replace coal due to its higher cost and uncertain supply, as explored in a report last year by the Institute for Energy Economics and Financial Analysis.
Over the past decade, the share of gas in China’s power mix has remained almost unchanged, while that of renewables has risen rapidly. As renewables develop, China is increasingly aiming to find a foothold for gas in the energy transition. Proponents argue gas power’s ability to quickly start and stop production makes it well-placed to deliver power when demand peaks, if the sun is not shining nor the wind blowing.
The “Natural Gas Utilization Management Measures” issued by the Chinese government in June 2024 encourage the use of gas power for this kind of “peak-valley” load management. However, GEM data finds that almost all the gas power units installed in recent years are combined-cycle gas turbines, often with large power capacity. This technology is highly efficient and can be used for meeting peak demand, but is actually better suited to generating baseload power.
Moreover, two-thirds of combined-cycle plants built in China over the past four years have been designed not only to generate electricity, but also to supply heat. To ensure reliable heat delivery, these units must run continuously and steadily, further constraining their operational flexibility. Being less able to ramp up or down quickly, they are poorly suited to supporting variable wind and solar.
Other countries, such as Australia, primarily use open-cycle gas turbines for meeting peak demand. These can start up within minutes and provide high operational flexibility. They are clearly positioned as a backup for the intermittency of renewable energy.
Supply challenges hinder gas power
Although China ranks fourth globally in gas production (after the United States, Russia and Iran), it is struggling to meet fast-growing demand for gas. Over the past two decades, the country has experienced gas supply shortages on a few occasions.
The most notable was in 2017, when China launched a bold campaign to switch from coal to gas in household heating. Meanwhile, new gas power installations doubled compared to 2016. The consequent demand surge caused a supply shortage and left many families without heating in winter, especially in rural areas.
Gas supply for industry was also heavily impacted. In Chongqing, a subsidiary of the German chemicals maker BASF had to break delivery contracts, citing the gas shortage as a force majeure (a serious, unexpected event). Households, industry and power plants – China’s three biggest gas consumers – have continuously competed for gas supply in subsequent years.
China currently imports around 40% of its gas, either through pipelines or on ships as liquified natural gas (LNG). Insufficient supply and dependence on imports push up prices: power generated from gas in China tends to cost USD 30-40 per megawatt-hour more than coal.
As a result, gas power strongly relies on government subsidies. It is therefore highly concentrated in coastal and economically advanced regions, where governments can afford to subsidise it to reduce local pollution and land-use pressure.
A potential exception is Sichuan, a landlocked province in south-west China that is rich in gas sources and produces a quarter of China’s gas. In 2024, Sichuan’s gas power increased to 2.88 GW from just 0.7 GW after two gas power projects were commissioned. Seven other gas power plants, totalling 8.33 GW, are currently under construction and expected to begin operating in 2025. Within two years, the province’s gas power capacity will increase 15-fold from its 2023 level.
This explosive increase is the result of a surge in gas power permits after 2021, when Sichuan experienced blackouts during an extreme heatwave and severe drought that significantly reduced hydropower generation. As a stress response, an unprecedented amount of gas power was proposed and quickly entered construction. These plants are designed to meet peak load when hydropower is reduced. They will inevitably compete for gas supply with gas exports to other provinces.
Sichuan currently exports 12 billion cubic metres (bcm) of gas to other provinces every year through a 2,000-kilometre pipeline. From 2027, it plans to export an additional 20 bcm every year through a new pipeline. Though its average annual gas production growth is 4 bcm, the new gas power capacity is estimated to consume 8.4 bcm of gas every year. With both the gas plants and the pipeline commissioned at a similar time, this gas-rich province may be facing a shortage.
Energy security concerns with an economic price
While China’s overall power consumption is still growing rapidly, gas power may yet manage to find space to grow. But if power demand slows or stagnates, it will be hit first. This is especially the case for Guangdong, which operates the biggest fleet of gas power plants in the country.
The province accounts for more than a third of China’s operating gas power capacity, based on GEM’s data; in 2024 alone, it commissioned more new capacity than the rest of the country combined.
This rapid growth was boosted by the quick build-up of LNG terminals along Guangdong’s coast. Currently, 70% of Guangdong’s gas power plants rely on imported LNG. Such dependence presents a potential risk, as the global gas price is vulnerable to geopolitical turbulence. For example, when Russia invaded Ukraine in 2022, soaring LNG prices caused many gas power units in Guangdong to stop running. That year, gas power generation dropped 7% and only two out of 37 gas power companies in the province saw profits.
In response to the impacts from the war in Ukraine and a widespread power supply shortage during the previous year, the provincial authority approved 10 coal power units in late 2022. Much of the related documentation cites unreliable gas supply caused by geopolitical risks as one of the key reasons to build additional coal power.
But these energy security concerns did not pause the gas power build-up. In fact, Guangdong’s gas power capacity increased by 70% between 2022 and 2024. This increase was motivated in part by sunk costs: a number of projects had advanced through planning and permitting stages, while others had already broken ground. In addition, the province continued to experience power shortages. But probably most importantly, large investment projects like gas plants were one way to kick-start the sagging local economy as it re-emerged from its Covid-19 downturn.
In the coming two years, 23 GW of coal and 13.5 GW of gas power capacity will be commissioned in Guangdong. According to GEM, that’s the equivalent to around one-third of its current coal capacity and a quarter of its gas. A nuclear power unit will begin operating as well, expected to generate three times more electricity than Guangdong’s 2024 consumption increase. An overcapacity is looming.
On top of this issue, a new wild card surfaced in April when the Trump administration began its tariff war on the world, targeting China specifically.
The tariff war will hit Guangdong especially hard. Its export value accounts for a fifth of China’s total exports, and 16% of its exports go directly to the American market. If power demand declines due to slowed exports, the province will need even longer to absorb the overcapacity – and gas power will be the first to feel the pain of financial losses, being the most expensive and vulnerable power type.
Jiangsu and Zhejiang are facing a similarly uncertain future. These provinces have the most gas power capacity after Guangdong and are also heavily reliant on exporting to the American market.
China has just five years to reach the goal of peaking its carbon emissions. The country needs to focus on its commendable renewable energy build-up and improve the grid for better management of these intermittent sources. Given the jaw-dropping speed of China’s renewable energy growth, the time for its great leap into gas-power generation may have passed before it has arrived.
Yu Aiqun is a research analyst on China at Global Energy Monitor.
Maggie Zheng is a China researcher on oil and gas at Global Energy Monitor.
This article appears courtesy of Dialogue Earth and may be found in its original form here.
The opinions expressed herein are the author's and not necessarily those of The Maritime Executive.
