Natural gas demand rises in first half

China's apparent demand for natural gas increased some 16.8 percent during the first half of this year, with investment in gas-related utilities up 10.2 percent in the first half, the National Energy Administration said on Monday at a media briefing.

The nation has been stepping up supplies of natural gas from home and abroad, with incremental supply in 2018 witnessing substantial growth compared with the same period last year, especially in the regions with severe air pollution, said Li Fulong, head of the Development Planning Department of the administration.

Many regions are shifting to natural gas for heating as China aims to replace coal with cleaner fuel to fight air pollution, especially in northern provinces, which has helped to drive up consumption of natural gas, he said.

Crude oil consumption was up 2.5 percent in first six months from a year ago while coal consumption was up 3.1 percent in the first half. Investment in thermal power utilities was down 17 percent in the first half versus last year, the administration said.

Analysts believe the increase in natural gas demand is in accordance with China's ambition to optimize its energy mix and replace traditional fossil fuels with cleaner ones.

The National Development and Reform Commission, China's top economic regulator, is aiming for gas to account for 8.3 percent to 10 percent of the nation's primary energy demand by 2020 and China has been increasing the share of gas in the energy mix as evidenced by higher gas consumption growth achieved in the first quarter than other fossil fuels, said Wang Lu, an Asia-Pacific oil and gas analyst at Bloomberg.

"Although it is the world's third-largest gas consumer, outflanked only by the United States and Russia, China sees gas accounting for just about 6 percent of its energy mix, substantially lower than the 24 percent global average," she said.

"China aims to raise the share of natural gas in primary energy consumption to levels closer to those achieved in other countries, and its higher gas-consumption goals will be fulfilled by developing shale gas, increasing imports and expanding storage capacity."

China's electricity consumption, an important indicator of economic activity, also rose significantly during the first half of this year, rising 9.4 percent to some 3.23 trillion kilowatt-hours in the first six months, a half-year record high during the past six years, said the administration.

Newly added installed electricity capacity of clean energy including nuclear, wind power and solar power accounted for 66.1 percent of newly added total installed capacity, up 5.4 percent year-on-year. The generating capacity of nuclear, wind power and solar power saw a year-on-year increase of 19 percent, higher than the 11 percent of the power generation growth of thermal power, it said.

According to Liang Zhipeng, deputy director of the new energy and renewable energy department of the administration, China's electricity generating capacity of renewable energy continued to expand in the first half of this year, with its installed renewable energy reaching 680 million kilowatts, up 13 percent year-on-year, including 340 million kilowatts of installed hydro power, over 170 million kilowatts of installed wind power, 150 million kilowatts of installed photovoltaic power and 16.34 million kilowatts of installed biomass power.