By Wan Zhihong (China Daily)
Updated: 2007-11-09 13:54

China, the world's second biggest energy consumer, plans to boost its natural gas production by 50 percent by 2010 to meet increasing demand.

"The nation's gas production will be 90 billion cubic meters in 2010. Natural gas will then account for 5.3 percent of the nation's total energy consumption," said Yang Zhiyi, deputy general manager of Sinopec Natural Gas Co Ltd at Asia Gas Congress 2007 yesterday.

China's natural gas demand is projected to reach 140 billion cubic meters in 2010, when the country will import around 20 billion cubic meters of natural gas, he said.

China's natural gas output was 58.5 billion cubic meters last year. Gas production has seen a 14.8 percent growth since 2002.

As the nation's largest oil and gas producer, PetroChina last year produced 44 billion cubic meters of natural gas, an increase of 20 percent.

The company's gas output mainly comes from four gasfields: Sichuan field, Tarim field in the Xinjiang Uygur Autonomous Region, Changqing field in Shaanxi and Inner Mongolia, and Qinghai gasfield.

Earlier this year, PetroChina's parent company CNPC announced the route of China's second West-East natural gas pipeline. The pipeline will transmit natural gas from the Central Asian countries, including Turkmenistan, and Northwest China's Xinjiang Uygur Autonomous Region to energy-thirsty eastern and southern China, including Shanghai and Guangdong.

The project will be kicked off in 2008 and natural gas supply will start in 2010. The designed annual natural gas transmission volume will be 30 billion cubic meters per year.

Two other oil giants, Sinopec and CNOOC, have also seen rapid growth in the natural gas sector. Last year, output of the two companies was 7.3 billion cubic meters and 6 billion cubic meters respectively.

Sinopec's Puguang Gasfield in Sichuan Province is the company's biggest discovery in natural gas in recent years. CNOOC's LNG terminal in South China's Guangdong Province is also the first LNG terminal in China.

Natural gas still accounts for a small part of China's total energy consumption. Statistics show natural gas now accounts for around 3.5 percent of the total, compared with 20 percent in the developed countries.

China should adopt a more flexible mechanism for pricing to ensure healthier profits for the industry, said those in the industry.

"The pricing mechanism for natural gas in China is subject to further reform so that it can match its international counterparts," said Tang Yali, vice-president of PetroChina Natural Gas & Pipeline Co Ltd.