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China's winter natural gas demand to rise 10% from year earlier

China's winter natural gas demand to rise 10% from year earlier

FILE PHOTO: An employee works on the production line of tanks for liquefied natural gas (LNG) at an energy equipment company in Nantong, Jiangsu province, China March 14, 2019. REUTERS/Stringer

TIANJIN: China's demand for natural gas is expected to rise to 180 billion cubic meters (bcm) this winter, up 10 per cent from a year earlier, an official at PetroChina, the country's top oil and gas producer, said on Thursday (Oct 28).

Petrochina has secured 106.2 bcm of gas supplies for this winter, up 8.4 per cent from a year ago, the official told a seminar organised by state-backed Chongqing Gas Exchange in Tianjin.

Li Wei, a vice director at PetroChina's natural gas marketing company, the country's largest natural gas wholesaler, said about 60 bcm of the natural gas would be supplied from domestic sources, while imported pipeline gas and liquefied natural gas (LNG) would reach about 20 bcm and 10 bcm, respectively.

PetroChina plans to supply 82 bcm of natural gas for residential heating in cities and sell the rest to industrial sectors such as fertiliser and chemicals.

"We expected that in general gas supply is able to meet the market demand this winter, but there could be tight supply in some peak periods," said Li, adding that potential extreme was a major uncertainty.

Meteorological experts have predicted the return of the El Nino weather pattern this winter, indicating lower temperatures in northern China and less rainfall in southern China which could lead to stronger gas demand for heating and power generation.

The central government has urged energy firms to step up efforts to boost gas supply before winter heating demand emerges in mid-November.

So far, China has secured a total of 174.4 bcm of natural gas supply for this winter, according to PetroChina's Li and Li Jianlei, a manager at Sinopec.

Sinopec was set to provide a total of 27 bcm of natural gas to the market for this winter, including 13.24 bcm from its domestic fields.

Sinopec's Li also said the company is "actively" increasing gas storage for emergency use. A new 266,000 cubic metres berth at its Tianjin LNG terminal is scheduled to launch by end-November.

GAS FOR POWER GENERATION

Chinese energy firms and government researchers expect a significant increase in gas demand for power generation and industrial sectors this winter as a nationwide coal supply crunch and power outages drive up demand for alternative fuels.

China's carbon targets have restrained coal output and coal-fired power utilisation, which has led to increasing gas demand for electricity generation, said PetroChina's Li.

Having previously only served as a backup fuel during peak demand periods, some gas is now being used regularly for power generation, he said.

About 4.44 billion cubic metres of natural gas was consumed for power generation in September, up 22.5 per cent from a year ago, data from Chongqing Gas Exchange showed, when more than half of Chinese regions suffered from power shortages partly due to insufficient coal supplies for power plants.

Tian Lei, a researcher from the Chinese Academy of Macroeconomic Research, estimates China's gas consumption will reach 365-370 bcm in 2021, with an increase 10 bcm for the power sector.

Source: Reuters/gs

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