China wants to import more natural gas

Xinhua
China's natural gas import is expected to rise as new cross-border gas pipelines and liquefied natural gas terminals will be put into use, a Ministry of Commerce spokesperson said.
Xinhua

China's natural gas import is expected to rise as new cross-border gas pipelines and liquefied natural gas terminals will be put into use, a Ministry of Commerce spokesperson said Thursday.

"China supports domestic enterprises to increase natural gas output and at the same time to diversify imports of the resource," said spokesperson Gao Feng at a regular press conference.

Calling imports "a significant source" of China's natural gas supply, Gao attributed increasing imports to rising domestic demand and the improvement of infrastructure facilities.

Statistics from China's customs showed that from January to October of this year, China's natural gas imports rose 24.9 percent year on year to 54.165 million tonnes.

Of the figure, liquefied natural gas (LNG) imports surged 47.7 percent to a record high of 29.092 million tonnes, Gao replied in response to a question on the ongoing natural gas shortage in northern China.

As millions of households have changed to gas instead of coal for heating this winter to help combat air pollution, there has been a sudden surge in the demand of natural gas.

Since winter heating began on November 15, the factory prices of LNG has increased by 200 yuan to 300 yuan on average per day. On December 1, the figure in some LNG plants even rose to a record high of 9,000 yuan (US$1,360) a tonne, according to an industry report.

The Development and Reform Commission of Hebei Province has activated a second-level alert over natural gas supply, indicating that the province's natural gas supply is 10 to 20 percent lower than its total demand.

To remedy the situation, consumption for industrial and commercial use has been restricted. Shandong, Henan, Shaanxi, Ningxia and Inner Mongolia also reported shortages.

Xu Bo, a senior analyst with China National Petroleum Corporation's (CNPC) Economics and Technology Research Institute, estimated that natural gas use was expected to reach 230 billion cubic meters this year with 20 billion cubic meters coming from the coal-to-gas transition.

Xu projected a growth rate of 17 percent for the natural gas consumption this year, compared to seven percent last year.

From January to September, China's LNG consumption has rose to 167.6 billion cubic meters, up 16.6 percent year on year.` To ensure gas supply, China's state-owned oil firms, including CNPC and China National Offshore Oil Corporation (CNOOC), are maximizing production at domestic gas fields and the National Development and Reform Commission has urged companies to be self-disciplined in pricing.

The ultimate solution lies in encouraging competitiveness of companies and improving infrastructure construction, said Jing Chunmei, a researcher with China Center for International Economic Exchanges.

More social capital should be encouraged in the creation or expansion of infrastructure like pipelines, ports with suitable terminals, storage facilities and transportation networks to lower costs through competition, said Jing. 

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