China says to build 200-mln-cu.m natural gas peak regulation mechanism General,  Gas 2018-03-09 11:59:00

China is set to build natural gas pipelines and storages with a total capacity 200 million cubic meters, in order to deal with emergency supply shortage like what happened in the past winter, said the head of the country's top economic planner in a press conference on March 6.


When asked how to solve the gas shortage under extreme conditions, He Lifeng, director of the National Development and Reform Commission, said China will build 100 million cu m of peak regulation facilities in the three major gas suppliers of CNPC, Sinopec and CNOOC and another 100 million cu m in local regions.


He didn't give a specific timeline for the facilities to be completed.


In 2017, China's natural gas consumption came back to double-digit growth and totaled 240.7 billion cu m, with an increase of 34 billion compared with a year ago.


Especially in the past winter, the switch of heating system from burning coal to gas spread most regions in North China, leading to a soar in gas demand. Despite urgent imports from neighboring countries and production from the three producers, supply was far behind the consumption.


"It was the first time we saw gas consumption surge at such volume and speed last year," He said. "It's a warning for us that it's necessary to establish enough capacity for peak adjustment."


China's gas imports totaled 96.2 billion cu m in 2017, accounting for almost 40% of the total demand. It's expected China will soon become the largest natural gas importer instead of Japan.


"With such high gas import dependence and big consumption, if the import channels are cut off due to emergencies like natural disasters or political factors, the gas shortage must shake the society and affect people's life," said Xue Guanglin, chairman of Brightoil Holding Company and a member of the CPPCC.


Among the 200 million cu b of regulation capacity, most of it is planned for storage.


China's major production areas are located in Tarim Basin in the west, Sichuan Basin in the southwest, Ordos Basin in the north and East Sea region, with gas supply representing 91% of the demand.


Since major consuming area is the eastern region, it's far from solving the supply issue if only depending on regulating pipeline transmission.


"There must be large-scale underground gas storage in consuming cities," Xue said.


By end-2016, China's gas storage was less than 10 billion cu m, data showed. Underground and LNG tank storages only amounted to 8 billion cu m, a far cry from the global average.


There are mainly three ways to stabilize gas supply in China – underground storage, LNG tank storage and piped transmission from gas fields.

(Writing by Alex Guo   Editing by Harry Huo)
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