Analysts sure power adequate to heat winter

With China's major oil and gas companies actively shoring up gas supply for the coming winter-spring heating season, analysts said a supply shortage is unlikely this year despite a recent power crunch in parts of the country.

China National Offshore Oil Corp said on Monday that the company has sourced 26.8 billion cubic meters of natural gas for the coming heating season, including from domestic production and gas sourced from abroad.

As a major liquefied natural gas or LNG importer of the country, CNOOC has stepped up LNG supply capacity this year, with the LNG sales reaching 33.7 billion cubic meters or bcm during the first nine months of this year, up 30 percent year-on-year. Domestic gas production will also exceed the target of more than 20 bcm, it said.

The company has also inked a long-term LNG purchase agreement with Qatar Petroleum, under which CNOOC will purchase 3.5 million metric tons of LNG annually from Qatar Petroleum for 15 years, the longest LNG purchase agreement by a domestic company in eight years.

China National Petroleum Corporation, the country's largest oil and gas producer by annual output, also said it will continue maximizing production at domestic gas fields while ensuring adequate gas imports to ensure sufficient supplies for the upcoming heating season.

Gas supply for the coming heating season has exceeded 100 bcm, up 8.4 percent year-on-year, it said. Domestic gas production, gas import and gas from storage tanks have increased by 3.3 percent, 17 percent and 16.3 percent, respectively, assuring enough gas for the heating season.

China Petroleum and Chemical Corp, also known as Sinopec and the world's largest refiner by volume, is also stepping up natural gas imports while boosting domestic gas production levels. It planned to purchase 13.3 bcm of LNG from overseas during the upcoming heating season.

The National Development and Reform Commission, the country's top economic regulator, has held meetings with the top three State-owned oil and gas companies－CNPC, CNOOC and Sinopec－and asked them to ensure sufficient natural gas supplies in the coming heating season.

Analysts said as the major oil and gas companies have started implementing plans to ensure adequate gas supplies as early as in the second quarter of this year, and as the domestic gas production is expected to hit a record high, it is unlikely that China will see a gas shortage this winter, although it will be potentially colder than normal due to the La Nina effect.

Luo Zuoxian, head of intelligence and research at the Sinopec Economics and Development Research Institute, said sufficient domestic gas production and increased long-term gas imports are sufficient to ensure domestic gas consumption this year.

"While domestic gas production in China this year is estimated to reach 200 bcm this year, gas imported from abroad also plays a major role in ensuring sufficient supplies of heating fuel," said Luo.

China's pipeline natural gas imports set a record of 3.87 million tons in September, up 2.2 percent from the previous high of 3.79 million tons in August, according to the General Administration of Customs.

China's total pipeline gas imports, including volumes from Central Asia and Myanmar, are expected to average 162 million cubic meters per day between this month and March 2022, according to Platts Analytics, up by 19 million cubic meters per day over the 2020-21 winter-spring level.

"Even if some uncertainties occur, all local governments have also come up with emergency plans to ensure sufficient civil gas supply," he said.