Nat­u­ral gas im­ports on the rise for China

China Daily (Canada) - - FRONT PAGE - By MICHAEL BARRIS in New York michael­bar­ris@chi­nadai­lyusa.com

An 8.2 per­cent jump in Novem­ber pipe­line nat­u­ral-gas im­ports re­flects China’s com­mit­ment to boost­ing nat­u­ral gas im­ports to re­duce fos­sil fuel con­sump­tion, an an­a­lyst said.

Wang Xiaokun, an an­a­lyst with Sub­lime China In­for­ma­tion Group, told China Daily that up to 32 per­cent of China’s nat­u­ral gas use this year will de­pend on im­ports .

“China’s de­pen­dency on for­eign nat­u­ral gas sup­plies will con­tinue to grow be­cause the out­put of ex­ist­ing do­mes­tic gas fields is de­creas­ing, while the coun­try’s de­mand is rapidly in­creas­ing,” Wang said.

As se­vere smog con­tin­ues to plague Bei­jing and other large cities, the Gen­eral Ad­min­is­tra­tion of Cus­toms, a gov­ern­ment agency that man­ages the im­port and ex­port of goods and ser­vices into China, on Tues­day said the coun­try im­ported 1.73 mil­lion met­ric tons of nat­u­ral gas via pipe­lines last month.

Nat­u­ral gas con­sump­tion in China typ­i­cally peaks dur­ing the win­ter months of the fourth and first quar­ters. But Novem­ber’s re­sults were note­wor­thy be­cause the spike in gas de­mand was driven by a 24.5 per­cent surge in LNG im­ports as three new LNG ter­mi­nals came online, the agency said.

From Jan­uary through Novem­ber, to­tal gas im­ports to­taled 33.82 mil­lion met­ric tons — in­clud­ing 15.59 mil­lion met­ric tons of LNG — up 30.3 per­cent from a year ear­lier, ac­cord­ing to the agency.

In 2012, China im­ported 42.8 bil­lion cu­bic me­ters of nat­u­ral gas, ac­count­ing for 29 per­cent of the coun­try’s to­tal gas con­sump­tion, ac­cord­ing to the eco­nom­ics and tech­nol­ogy re­search unit of China Na­tional Petroleum Corp, the na­tion’s largest nat­u­ral gas pro­ducer. The unit has fore­cast a 24 per­cent jump in 2013 nat­u­ral gas im­ports, to 53 bil­lion cu­bic me­ters.

CNPC Chair­man Zhou Jip­ing has said the com­pany will con­tinue to boost nat­u­ral gas im­ports, with more in­vest­ments in pipe­lines and liq­ue­fied nat­u­ral gas projects. China’s nat­u­ral gas projects are play­ing a big role in the coun­try’s drive to im­prove its air qual­ity, he said.

Two weeks ago, a re­port from the China En­ergy Fund Com­mit­tee said nat­u­ral gas pro­duc­tion in China is ex­pected to reach 190.6 bil­lion cu­bic me­ters by 2015 and up to 410 bcm by 2020. The re­port said China is pro­jected to ex­pand its share of LNG im­ports in the Asian Pa­cific re­gion to 20 per­cent from 8 per­cent by 2020.

China’s

de­pen­dency on for­eign nat­u­ral gas sup­plies will con­tinue to grow be­cause the out­put of ex­ist­ing do­mes­tic gas fields is de­creas­ing, while the coun­try’s de­mand is rapidly in­creas­ing.” WANG XIAOKUN AN AN­A­LYST WITH SUB­LIME CHINA IN­FOR­MA­TION GROUP

“By ad­just­ing for­eign im­ports ap­pro­pri­ately, main­tain­ing a ba­sic bal­ance be­tween sup­ply and de­mand, and fo­cus­ing on the de­vel­op­ment of do­mes­tic nat­u­ral gas pro­duc­tion, there will be less pres­sure to im­port ex­pen­sive nat­u­ral gas from over­seas sources,” the re­port said.

The US is switch­ing to LNG ex­port­ing from im­port­ing be­cause of its grow­ing un­con­ven­tional nat­u­ral gas pro­duc­tion. By 2011, nat­u­ral gas pro­duc­tion in the US ex­ceeded its pre­vi­ous record high of 1973, reach­ing 651.3 bcm.

Ed­ward Chow, a se­nior fel­low and en­ergy ex­pert with the Center for Strate­gic and In­ter­na­tional Stud­ies, a Wash­ing­ton-based think-tank, told a Man­hat­tan fo­rum on the en­ergy fund com­mit­tee’s re­port that the doc­u­ment re­flected “lit­tle con­cern” among China’s en­ergy ex­perts about their grow­ing de­pen­dency on im­ported nat­u­ral gas.

The re­port’s au­thors “ap­par­ently agree that China’s planned in­creases in pipe­line and liq­ue­fied nat­u­ral gas im­port ca­pac­ity will be needed through 2020, but af­ter that in­creased do­mes­tic pro­duc­tion from un­con­ven­tional sources will mostly take care of China’s fu­ture gas goals”, Chow said.

The re­port said un­der cur­rent pol­icy, most of the ob­jec­tives out­lined in China’s 12th Five Year Plan for nat­u­ral gas de­vel­op­ment “could be ex­pected to be ac­com­plished in a timely man­ner.”

It con­cluded that the “fu­ture suc­cess of China’s nat­u­ral gas in­dus­try” will de­pend on re­form­ing the up­stream gas mar­ket and do­mes­tic gas pric­ing mech­a­nism” as well as tax pro­ce­dures re­lated to nat­u­ral gas and other nat­u­ral re­sources.

De­spite dif­fi­cul­ties in sur­vey­ing, ex­plor­ing and costs, the re­port said “sub­sti­tut­ing gas for coal will per­sist as a cen­tral theme for China’s en­ergy in­dus­try at least in the near term fu­ture”.

Nat­u­ral gas “is likely to be the next fu­el­ing en­ergy to pro­pel the Chi­nese econ­omy to reach a more sus­tain­able and pros­per­ous end,” the re­port said.

With China “des­per­ately in need to en­large the share of nat­u­ral gas and other clean en­er­gies to op­ti­mize its pol­lut­ing and un­sus­tain­able en­ergy pro­file,” the na­tion is on the brink of “a golden era” for nat­u­ral gas de­vel­op­ment, ac­cord­ing to the re­port.

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