China's natural gas demand soars to historic high in 2017

sxcoal.com Policy,  Viewpoint,  Production & Sales 2018-02-12 16:20:00

China's natural gas consumption created a record high of 235.2 billion cubic meters (bcm) last year, with an increase of 17% or 34 bcm from a year ago, said the country's largest oil and gas producer China National Petroleum Corp. (CNPC) in an annual development report for oil & gas sector.


The demand surge mainly came from China's ambitious "coal-to-gas" conversion reform in heating system that covered most regions in the north in order to tackle air pollution, said the report.


After Beijing, Tianjin and Hebei's Langfang and Baoding set "non-coal areas" in the downtown, 3.94 million of households have completed "coal-to-gas/electricity" heating system reform in 28 northern cities including these four, not mentioned to millions of homes in other cities.


The report estimated the urban natural gas burns for heating purpose reached 88.5 bcm, up 14.2% on the year prior.


Driven by price hikes of downstream products and stringent environmental requirements, the full-year natural gas consumption by industrial sector totaled 72.7 bcm, rising 20.2% from 2016, with 46.7 bcm used for power generation, up 22.9%.


Compared with the rapid-growing demand, the supply didn't keep up the pace, especially in December, the peak consumption time in the winter heating season.


Although China stepped up natural gas output to 147.4 bcm last year, up 8.5% from 2016, according to data from the National Bureau of Statistics, the country had to import a huge amount from other countries.  


The report estimated natural gas imports totaled 92.6 bcm in 2017, up 24.4% year on year, accounting for 39.4% of the total demand.


Aside from the more-than-expected gas usage for heating amid "coal-to-gas" conversion and rapid growing industrial demand, the report also attributed the country's gas reserving and scheduling capacity to the supply shortage in the winter.


By end-2017, China's underground natural gas reserves only made up 3.4% of the total demand, a far cry from 10-15% of other countries. Most cities hadn't yet set up gas storage facilities and needed to rely on dispatch from natural gas suppliers.


Meanwhile, an effective pricing system for peak shaving of gas supply is a must for improvement of gas supply capacity in the future as the current system can't present the peak shaving costs of underground and LNG tank storage.


The report said China's supply gap will remain in the next few years when all "coal-to-gas" projects are set to be completed as planned.


In 2018, China's natural gas demand is expected to reach 258.7 bcm, with a slower growth at 10% or so, said a researcher from CNPC. On the other hand, domestic output will grow to 160.6 bcm while imports will reach around 10.5 bcm, which is likely to make China go beyond Japan to be the No.1 gas importer in the world.



(Writing by Alex Guo  Editing by Harry Huo)
For any questions, please contact us by inquiry@fwenergy.com or +86-351-7219322.

Share this article
Connect with us

Editor's Pick

1 Chinese buyers hesitant to book Indonesian coal as domestic prices gain steam 2021-03-05

Chinese buyers are still hesitant to make bookings of Indonesian thermal coal, despite recent rebound of Chinese domestic coal prices, which may lead to a rise in the seaborne market, as shipping cost

2 China's met coke prices set to decline for 3rd round 2021-03-05

China's metallurgical coke prices remained under pressure from a slight oversupply, as steel mills turned to cautious purchases amid production cuts and sufficient coke inventories. Tangs

3 Weekly China coal market news summary (Mar 1-Mar 5) 2021-03-05

Daqin Feb coal shipments soar 45.3% YoY China's coal dedicated Daqin rail line, which connects coal hub Shanxi and transfer port of Qinhuangdao, shipped 34.45 million tonnes...

4 Weekly global coal market news summary (Mar 1-Mar 5) 2021-03-05

Mongolian coking coal inflows to China likely to increase via Erlian and Mandula China is likely to import more Mongolian coking coal through Erllianhot and Mandula border crossings in the fou

5 China to reduce energy use per unit of GDP by 3% in 2021: govt report 2021-03-05

China aims to cut energy consumption per unit of GDP, a gauge of how much energy is used in economic growth, by around 3% in 2021 in a bid to further its green drive, Premier Li Keqiang said in his go

6 China Feb thermal coal market: prices nose-diving on poor demand 2021-03-05

China's thermal coal market in February extended the downward trend from the second half of January, as demand kept shrinking on the back of weakened heating need. The week-long Lunar New Year holiday

7 Daqin Feb coal shipments soar 45.3% YoY 2021-03-05

China's coal dedicated Daqin rail line, which connects coal hub Shanxi and transfer port of Qinhuangdao, shipped 34.45 million tonnes of coal in February, rising 45.3% from a year ago, with the growth

8 Mongolian coking coal inflows to China likely to increase via Erlian and Mandula 2021-03-04

China is likely to import more Mongolian coking coal through Erlianhot and Mandula border crossings in the fourth quarter this year, following the commissioning of Mongolia's Tavan Tolgoi - Zuunbayan

9 China's portside thermal coal market climbs on price rise in production areas 2021-03-04

Offers and bids of spot thermal coal at northern China's major trading ports continued to pick up on March 4 driven by rising prices in production areas. But trading activity hasn't yet improved great

10 China's Baowu to seek over 700,000 t met. coal from Russia 2021-03-04

China Baowu Steel Group has signed a strategic partnership agreement with Sibanthracite Group, the largest producer of metallurgical coals in Russia, to seek for more than 700,000 tonnes of PCI coal a

Most Read Articles

1 Flash News 2021-03-01

Data showed coal stocks at the six coastal power groups were 15.52 million tonnes, up from 15.42 million tonnes a week earlier; their coal consumption combined rose from 536,000 tonnes to 585,900 tonn

2 Flash News 2021-03-01

China's coal-fired power generation capacity grew 4.7% YoY to 1.25 TW in 2020.Grid-connected wind power generation capacity surged 34.6% to 281.53 GW; solar power capacity increased 24.1% to

3 Flash News 2021-03-01

China's coal consumption gained 0.6% YoY in 2020, the 4th straight year of increase,NBS data showed on Feb 28. However,the share of coal consumption in energy mix declined to 56.8% in 202

4 Yancoal Australia reports loss in 2020, 1st time in 4 yrs 2021-03-02

Yancoal Australia, an overseas subsidiary of China's state-run Yanzhou Coal Mining, reported the first annual loss in 2020 in four years, due to decline in demand and coal prices, according to its fin

5 China's imports of Mongolian coal may continue to pick up 2021-03-01

Mongolian coking coal arrivals are likely to edge up further through Ganqimaodu border crossing into China in the near term, on the back of new policy, storage expansion and decline of freight rate.

6 Flash News 2021-03-03

Central China's Hunan province held 3.28 Mt of thermal coal used for power generation on Feb 24, enough to cover 20 days of usage, local energy bureau said.

7 Flash News 2021-03-01

Colombia's coal exports fell 25.8% WoW to 1.14 Mt on Feb 24, Kpler cargo-tracking data showed.

8 China's manufacturing PMI retreats to 50.6 in holiday-shortened Feb 2021-03-01

Activities in China's manufacturing sector slowed down in February as the Lunar New Year holiday has put a lid on business operations. The Purchasing Managers' Index fell to 50.6 in Febru

9 Mongolian coal washing capacity to tighten at China's Ganqimaodu border 2021-03-02

Coal-washing capacity in Ganqimaodu border crossing in Inner Mongolia of China is likely to turn tighter in the near term, after some washing plants were requested by local government to suspend produ

10 Anglo American to quit thermal coal business by 2024 2021-03-02

Global mining giant Anglo American plans to hive off thermal coal business by 2024 as part of a drive to deepen its green practice, the miner said on February 25. The company plans to sel