China to Increase Its Use of Nature Gas
Driven by surging oil prices in the global market and rising concerns over environmental safety, Beijing has started adjusting the country’s energy structure to a more sustainable and environmental friendly model. Natural gas is expected to play a bigger role in the future.
Reporter:
At a recent Asian Gas Congress held in Beijing, Paul D’Arcy, the managing director of Shell Gas and Power International in China, said the world is facing the challenges of balancing economic development, energy security and the environment.
“Each fuel type has advantages and disadvantages, coal is cheap but has a larger impact on the environment, nuclear can provide energy security but raises long-term environmental safety issues, alternatives such as wind and solar are clean but expensive. With the economic efficiency and environmental advantages of natural gas, and with its relative abundant and expanding infrastructure, we do believe gas will play an increasing role in meeting the world’s expanding energy needs.”
And that trend is expected to be seen in China.
Tang Yali, Vice President of PetroChina Natural Gas and Pipeline Company, predicts that China will soon grow into a mature market for natural gas.
“China’s natural gas market has developed quite fast, in 2006, China produced over 58 billion cubic meters of natural gas, an increase of 10 billion compared with a year earlier. Meanwhile, China’s consumption of natural gas is also growing quickly. Between 2000 and 2004, the average growth rate reached 16 percent. In 2006, China totally consumed 49 billion cubic meters of natural gas.”
According to Tang Yali, natural gas currently accounts for three percent of primary energy consumption in China, which has a large potential to increase.
“We expect China’s consumption of natural gas will grow by an average of 10 percent per year, and by 2012, the overall demand for natural gas will reach 140 billion cubic meters.”
But there may be a bottleneck in supply. Yang Zhiyi is Deputy General Manager of Sinopec Natural Gas.
“Although China is speeding up its exploitation of natural gas, the domestic production of natural gas still hardly meets its demand. Statistics show that China is expected to require 140 billion cubic meters of natural gas by 2010, while domestic production will only reach 90 billion. Last year, China imported 680 thousand tonnes of liquefied natural gas, and by 2010, import will reach 10 million tones per year.”
Last June, China’s first LNG project started operations in Shenzhen, receiving the countries first batch of imported LNG from Australia.
The gap between China’s demand and supply of natural gas is being viewed as a golden opportunity for foreign businesses. Ron Billings is from Exxon Mobil.
“As far as supplying, absolutely we do. We’ve had a relationship over the last few years with some Chinese companies and will continue to talk with them as potential customers.”
According to China’s energy development outlook, by the year of 2020, the country will lift its rate of natural gas consumption, as a primary energy source, from the current 3 percent to 10 percent. In the next five to ten years, 10 LNG receiving terminals will be built along China’s eastern coastline.
Tags: Gas, LNG, PetroChina, power, Sinopec