Natural gas imports on the rise for China

An 8.2 percent jump in November pipeline natural-gas imports reflects China's commitment to boosting natural gas imports to reduce fossil fuel consumption, an analyst said.

Wang Xiaokun, an analyst with Sublime China Information Group, told China Daily that up to 32 percent of China's natural gas use this year will depend on imports .

"China's dependency on foreign natural gas supplies will continue to grow because the output of existing domestic gas fields is decreasing, while the country's demand is rapidly increasing," Wang said.

As severe smog continues to plague Beijing and other large cities, the General Administration of Customs, a government agency that manages the import and export of goods and services into China, on Tuesday said the country imported 1.73 million metric tons of natural gas via pipelines last month.

Natural gas consumption in China typically peaks during the winter months of the fourth and first quarters. But November's results were noteworthy because the spike in gas demand was driven by a 24.5 percent surge in LNG imports as three new LNG terminals came online, the agency said.

From January through November, total gas imports totaled 33.82 million metric tons - including 15.59 million metric tons of LNG - up 30.3 percent from a year earlier, according to the agency.

In 2012, China imported 42.8 billion cubic meters of natural gas, accounting for 29 percent of the country's total gas consumption, according to the economics and technology research unit of China National Petroleum Corp, the nation's largest natural gas producer. The unit has forecast a 24 percent jump in 2013 natural gas imports, to 53 billion cubic meters.

CNPC Chairman Zhou Ji-ping has said the company will continue to boost natural gas imports, with more investments in pipelines and liquefied natural gas projects. China's natural gas projects are playing a big role in the country's drive to improve its air quality, he said.

Two weeks ago, a report from the China Energy Fund Committee said natural gas production in China is expected to reach 190.6 billion cubic meters by 2015 and up to 410 bcm by 2020. The report said China is projected to expand its share of LNG imports in the Asian Pacific region to 20 percent from 8 percent by 2020.

"By adjusting foreign imports appropriately, maintaining a basic balance between supply and demand, and focusing on the development of domestic natural gas production, there will be less pressure to import expensive natural gas from overseas sources," the report said.

The US is switching to LNG exporting from importing because of its growing unconventional natural gas production. By 2011, natural gas production in the US exceeded its previous record high of 1973, reaching 651.3 bcm.

Edward Chow, a senior fellow and energy expert with the Center for Strategic and International Studies, a Washington-based think-tank, told a Manhattan forum on the energy fund committee's report that the document reflected "little concern" among China's energy experts about their growing dependency on imported natural gas.

The report's authors "apparently agree that China's planned increases in pipeline and liquefied natural gas import capacity will be needed through 2020, but after that increased domestic production from unconventional sources will mostly take care of China's future gas goals", Chow said.

The report said under current policy, most of the objectives outlined in China's 12th Five Year Plan for natural gas development "could be expected to be accomplished in a timely manner."

It concluded that the "future success of China's natural gas industry" will depend on reforming the upstream gas market and domestic gas pricing mechanism" as well as tax procedures related to natural gas and other natural resources.

Despite difficulties in surveying, exploring and costs, the report said "substituting gas for coal will persist as a central theme for China's energy industry at least in the near term future".

Natural gas "is likely to be the next fueling energy to propel the Chinese economy to reach a more sustainable and prosperous end," the report said.

With China "desperately in need to enlarge the share of natural gas and other clean energies to optimize its polluting and unsustainable energy profile," the nation is on the brink of "a golden era" for natural gas development, according to the report.

michaelbarris@chinadailyusa.com