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China’s gas demand to slow this year
PERFORMANCE
CHINA’S state-run Sinopec Gas has forecast that the country’s natural gas demand will expand by 10% this year to 307bn cubic metres. This year’s anticipated growth rate is a marked drop from the roughly 18% jump witnessed in 2018, when the country consumed 280 bcm of gas.
“Due to the macroeconomic situation and the government’s easing [of its] push to the coal- to-gas programme, China’s gas consumption growth is slowing,” Reuters quoted a company spokesperson as saying. The newswire noted that the official was reading prepared comments on behalf of Sinopec Gas’ deputy chief economist, Wu Gangqiang. “We expect the consumption growth for this year is around 10%.”
Sinopec Gas expects national gas demand to climb to 510 bcm by 2030, with the city gas, industrial and gas-powered utility sectors driving consumption. The official said city gas demand was predicted to grow rapidly over the next 10-15 years driven by the country’s ongoing urbanisation. City gas consumption stood at 92.5 bcm in 2018.
Sinopec Gas also anticipates industrial demand rising from 110.6 bcm last year as the government introduces more stringent environ- mental measures. Gas is unlikely to challenge coal in the power sector any time soon, with the company pointing to the high cost of gas as a feedstock as well as shrinking government sub- sidies. Utilities’ gas demand stood 48.4 bcm.
Domestic production is forecast to amount to about 175 bcm this year, with shale gas account- ing for 15 bcm of that figure, Reuters quoted Ministry of Natural Resources research official Pan Jiping as saying. These figures should lead to a 132 bcm gap in supply, which will have to be filled with imports, up from 124.7 bcm in 2018.
Although the country has been expanding its overland import options, in the short to medium term any expansion in imports will likely be met by increased shipments of liquefied natural gas (LNG), and companies are already looking to take advantage.
Private investors
Reuters quoted unnamed sources on October 15 as saying that Yantai Port Group intended to launch two LNG storage facilities by 2022.
The sources added that the company expected the government to approve the pro- jects, which are being built in partnership with affiliate Yantai LNG Group, this month. Yantai LNG will hold a 19% stake in the project.
Land reclamation for the two facilities, which will have 5mn tonnes per year and 6.5mn tpy of capacity respectively, has already started, one of the sources said.
The first phase of development will reportedly cost $1.1bn and will establish 40mn cubic metres per day of regasification capacity and 5mn tpy of import capacity. The project will include an LNG-dedicated port area, a berth capable of receiving 266,000-cubic metre LNG carriers, a 50,000 cubic-metre transshipment berth and five 200,000 cubic metre storage tanks.
The second phase is slated to launch by 2025 and will comprise of two LNG berths of a simi- lar size to the first as well as another five 200,000 cubic metre storage tanks.
Yantai Port is also investing in a separate 5mn tonne storage project which CNPC aims to con- struct by 2022. Yantai will take 49% stake in that project, with CNPC holding the majority share of 51%, he said.
325 300 275 250 225 200 175 150 125 100
75 50 25
0
2009 2010
2011 2012
Production
2013 2014 2015 Consumption Imports
2019F
Data: NDRC, NBS, CNPC
China's natural gas balance
™
2016 2017 2018
Source: BP
P10
w w w . N E W S B A S E . c o m Week 41 16•October•2019
bcm per year