Stable demand, supplies expected for natural gas seen for ’19 winter

By Chu Daye Source:Global Times Published: 2019/10/24 19:39:39

A view of the 8,882-meter-deep oil and natural gas well in Northwest China's Xinjiang Uyghur Autonomous Region Photo: Courtesy of CNPC

Vigilance, planning and flexibility to ensure ample supplies of natural gas from China's energy majors will likely provide stable supplies to the nation's northern regions for the approaching winter, analysts said on Thursday.

Following a 2017 winter gas shortage that left some households in freezing cold, China's three state-owned majors are describing supplying sufficient gas supplies for the region a "political task."

Jin Lei, an associate professor at the China University of Petroleum, said overall gas consumption during the upcoming winter will still increase but growth will be subdued, due to slower economic expansion and what's forecast to be a relatively warm winter.

State-owned oil giant Sinopec said in a statement sent to the Global Times on Thursday that it plans to buy more liquefied natural gas (LNG), including timely spot purchases, this winter.

The company has built up inventories of 8.81 billion cubic meters (bcm) of natural gas for the 2019-20 winter-spring seasons, up 15 percent compared with last winter.

Sinopec has increased its capacity to offer more gas in the past years. From January to September, the company led other gas suppliers with an increase of 30 percent in volume.

China National Offshore Oil Corp (CNOOC), the largest LNG importer in China, said it plans to increase natural gas supplies for the winter by 1.5 bcm to a total of 24.5 bcm. The company has also combined long-term contracts with short-term ones and increased its capacity to interchange imported gas and domestically produced gas, including supplies produced in offshore oil rigs and inland gas fields. It is also banking on new models of transportation including LNG containers.

"The increase in total gas demand could be around 40 bcm, the same as in 2018," Jin told the Global Times on Thursday.

In 2018, China's gas consumption totaled 280 bcm.

The gap has been partially filled by a doubled increase in imports from Kazakhstan, which upped its exports to China from 5 bcm to 10 bcm. Experts said the functioning of the overland pipeline gas from Russia will further diversify China's gas supplies.

China National Petroleum Corp (CNPC) plans to release 2.23 bcm of gas from its inventories, which would be an increase of 31.7 percent from last year, according to a statement posted on its website. 

CNPC said it will ensure the Power of Siberia Russia-China natural gas pipeline starts supplying gas in December. The construction of the northern section of the China-Russia gas pipeline eastern route was completed in October. 

In 2018, China's natural gas imports stood at 126 bcm, with a 35-percent reliance rate on foreign sources. Jin forecast the ratio will remain largely the same for 2019. 

However, with the rapid increase in costlier natural gas imports, there will be more impetus to utilize China's vast coal resources through clean coal technologies.


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