Natural gas shortage may force plant closure
By Wang Ying (China Daily)
Updated: 2006-02-21 06:25

The shortage of natural gas has put the bulk of China's gas-fired power plants on the verge of closure, and industry leaders are calling for the government to trim its gas power development plans.

Due to the lack of gas supplies in East China, gas-fired power generation units with a total capacity of as much as 4 gigawatts (GW) must remain unused in the region where the country's biggest gas pipeline ends, Wang Yonggan, secretary general of China Electricity Council (CEC), said.

The same is true with the energy-guzzling southern areas of China, primarily driven the fast-growing regional economy of Guangdong Province.

"In the south, the construction completion of a gas power plant also means it's shutdown - because there is no gas to run it," Wang said over the weekend at a power conference hosted by CEC, the industry association of China's electricity generators.

By the end of last year, installed capacity of China's gas power plants reached 10.7 GW, accounting for 2.1 per cent of the country's total power-generating facilities, which totalled 508 GW, said Wang Jianping, president of China Power Engineering Consulting (Group) Corp.

According to the plan drafted by the National Development and Reform Commission (NDRC), the country will increase the gas power capacity to 30 GW by 2010 and further to 60 GW by 2020.

But the electricity council's Wang Yonggan warned that the gas shortfalls would make the target almost impossible to reach.

"Related government bodies should come up with more practical targets of China's gas power development," Wang Yonggan said.

Zhang Guobao, vice-minister of NDRC, speaking at the same power conference, said the insufficient gas supply has made the existing gas power plants in Guangdong Province "dire waste," but he didn't give a figure concerning a proper scale of China's power plants fuelled by natural gas.

In a similar situation, Zhang said, the government is closing small oil-fired power plants in Guangdong, and building similar-sized coal-driven plants to meet demand and ensure a smooth displacement of working staff.

Gas demand from the huge Chinese market is expected to reach 120 billion cubic metres (bcm) by 2010 and 200 bcm by 2020, but its estimated domestic production would be only 80 bcm and 120 bcm respectively.

To fill the large gap, the country's energy majors have massive plans to build LNG (liquefied natural gas) terminals to import gas along the coast, and build cross-nation pipelines to link the resource-rich west with the energy-hungry east and south.

But obstacles still exist that could delay these project plans. For example, the country's top offshore oil producer, China National Offshore Oil Corp (CNOOC), is confronted with disagreements over prices to secure gas supplies from Indonesia's BP-led Tangguh project, for CNOOC's Fujian LNG terminal.

Liu Junshan, spokesman of CNOOC, yesterday said talks with the Tangguh project are still going on. He said CNOOC's gas power plants are auxiliary with its LNG terminal layout, ensuring stable gas supplies for its own power plants.

(China Daily 02/21/2006 page9)