Nat­u­ral gas de­mand to see growth this year

China Daily (USA) - - FRONT PAGE - By ZHENG XIN zhengxin@chi­

China’s nat­u­ral gas con­sump­tion will in­crease this year on the back of con­tin­ued pol­icy back­ing from Bei­jing, as part of a broader clean-en­ergy drive to re­place coal with nat­u­ral gas and other ef­forts to re­duce chronic air pol­lu­tion.

The liq­ue­fied nat­u­ral gas mar­ket in the coun­try has wit­nessed a rapid growth so far this year, with the Jan­uary-Septem­ber pe­riod see­ing a to­tal con­sump­tion of 167.6 bil­lion cu­bic me­ters, a 16.6 per­cent year-onyear growth, higher than last year’s 7 per­cent, ac­cord­ing to CNPC Re­search In­sti­tute of Eco­nomics and Tech­nol­ogy.

The quiet pe­riod be­tween sum­mer and win­ter months has also seen a pick up in the Chi­nese nat­u­ral gas mar­ket, while the peak sea­son wit­nessed a more dras­tic growth, said Duan Zhao­fang, chief en­gi­neer of the nat­u­ral gas mar­ket re­search depart­ment of the in­sti­tute.

Platts An­a­lyt­ics fore­casts that China will sur­pass South Korea to be­come the world’s sec­ond largest LNG im­porter next year. While South Korean LNG de­mand is ex­pected to re­main un­der 40 mil­lion met­ric tons in 2018, Chi­nese LNG im­ports will con­tinue to grow, reach­ing nearly 50 mil­lion tons in 2018, it said.

Ac­cord­ing to Marc How­son, di­rec­tor of LNG Mar­ket De­vel­op­ment from S&P Global Platts, Chi­nese LNG im­ports are up nearly 50 per­cent year-on-year to-date in 2017, driven by the gov­ern­ment’s ef­forts for cleaner burn­ing fuel.

This has been fa­cil­i­tated by grow­ing con­tracted LNG sup­plies into China, par­tic­u­larly from both western and eastern Aus­tralia as well as the US Gulf Coast, he said.

Li Li, an en­ergy re­search di­rec­tor at ICIS China, said China has set a high tar­get for the pro­por­tion of nat­u­ral gas in the coun­try’s en­ergy mix by 2020. China needs to speed up nat­u­ral gas sup­ply from home and abroad to meet the de­mand.

Ac­cord­ing to the Na­tional De­vel­op­ment and Re­form Com­mis­sion, China’s nat­u­ral gas sup­plies will ex­ceed 360 bil­lion cu m by 2020, and will ac­count for 10 per­cent of China’s en­ergy pro­duc­tion by then com­pared with the cur­rent 7 per­cent.

Out­put of nat­u­ral gas rose from 50 bil­lion cu m in 2005 to 135 bil­lion cu m in 2016.

While cur­rently some 39 per­cent of nat­u­ral gas con­sumed in China is im­ported from abroad, Chi­nese oil gi­ants are also step­ping up im­ports from over­seas to en­sure en­ergy sup­ply and se­cu­rity.

Qu Guangxue, a spokesman for China Na­tional Petroleum Corp, the coun­try’s largest oil and gas sup­plier and pro­ducer, said the com­pany will step up nat­u­ral gas im­ports and fur­ther ne­go­ti­ate with other Cen­tral Asian na­tions for ad­di­tional stocks.

The China-Cen­tral Asia nat­u­ral gas pipeline will trans­port 200 bil­lion cu m of nat­u­ral gas by Novem­ber, equiv­a­lent to the to­tal an­nual nat­u­ral gas con­sump­tion of China or 11 years’ of nat­u­ral gas sup­ply for Bei­jing.

Mean­while, China is also step­ping up build­ing ter­mi­nals and in­fra­struc­ture to help meet the up­surge in de­mand, with its oil and gas pipeline net­work ex­pected to reach 240,000 kilo­me­ters by 2025 from the cur­rent 112,000 kilo­me­ters.

This means that the coun­try will need to build an ad­di­tional 128,000 kilo­me­ters of pipeline in the next few years, ac­cord­ing to the Na­tional De­vel­op­ment and Re­form Com­mis­sion.

16.6 per­cent the year-on-year growth in liq­ue­fied nat­u­ral gas con­sump­tion in the coun­try dur­ing the first nine months of the year 39 per­cent to­tal share of im­ports in China’s over­all nat­u­ral gas con­sump­tion

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