NDRC to steady supply amid geopolitical conflicts
China targets oil, coal and gas, while also focusing on reserves and imports
China’s top economic planning agency said yesterday it would steady energy supply this year in the face of escalating geopolitical conflicts such as the Russian invasion of Ukraine, which has roiled global oil and gas markets.
Global benchmark Brent crude oil jumped by as much as 18 per cent to near US$140 per barrel yesterday morning after surging by 21 per cent last week.
The United States said on Sunday it was in “active discussions” with European nations about banning Russian oil imports, which may further drive up crude prices.
Lian Weiliang, a vice-director of the National Development and Reform Commission (NDRC), said high commodity prices would make imports more costly and there were challenges ahead to steady China’s energy supply.
“Since the beginning of this year, under the combined influence of factors such as the Covid19 pandemic, the monetary policy shift of major economies and especially the escalation of geopolitical conflicts, the international commodity price situation has become more severe, complex and uncertain,” Lian said at a briefing on the sidelines of China’s annual parliamentary meeting in Beijing yesterday.
There was growing price pressure on coal, iron ore, natural gas and soybeans, he said.
“It poses a new challenge to ensure domestic supply and price stability,” he said.
However, Lian also pledged the government would not limit power and gas use unless extreme situations arose.
Last year, China was hit by the worst power crisis in decades as a result of soaring coal prices, high demand for electricity and strict carbon emissions goals. More than half of the country’s provincial-level jurisdictions imposed power rationing.
Lian said the government would focus on boosting production of coal, oil and gas, while strengthening reserves and maintaining stable imports to counter volatility in commodity markets.
“By implementing these measures, we are confident in ensuring a safe and reliable supply of energy,” he said.
“The sources of China’s crude oil and natural gas imports have been diversified, and long-term contracts account for a high proportion. As long as all parties comply with the contracts, imports can remain generally stable.”
To boost China’s energy reserves, Lian said the government would speed up construction of deployable coal reserve capacity to more than 200 million tonnes, add more than 5 billion cubic metres of gas storage and increase emergency backup electricity to more than 30 gigawatts.
Power supply would be boosted by new solar and wind power projects in the Gobi and other desert regions. There would also be more investment in oil and gas exploration, Lian said.
China’s oil and gas imports declined in the first two months of this year, according to data released by the General Administration of Customs.
China’s oil imports for the first two months of this year fell by 4.9 per cent to 85.14 million tonnes from 89.55 million tonnes a year earlier.
Meanwhile, natural gas imports dropped by 3.8 per cent to 19.86 million tonnes from 20.65 million tonnes over the same period, customs data showed.