China could this year see its first drop in natural gas consumption in two decades amid its economic slowdown.
State energy officials said on Thursday that demand this winter looks set to rise more modestly than in previous years.
Total gas demand is likely to fall 1% this year to 363.6 billion cubic metres, according to Li Jianping, a researcher with China National Offshore Oil Company (CNOOC).
That would be the first annual decline since at least 2002.
Gas consumption this winter is pegged at between 168 to 190 billion cubic metres, a wide range forecast due to uncertainty over weather conditions and economic recovery, officials told a seminar hosted by state-backed Chongqing Gas Exchange that was live streamed.
ALSO SEE: China Ramps up LNG Investment to Avoid Power Shortages – SCMP
Japan May be Top LNG Importer
China is set to hand back to Japan this year its title as the world’s largest importer of liquefied natural gas as protracted Covid curbs and high import costs hampered demand, easing the pressure on tight global supplies amid the Ukraine crisis.
While slashing high-priced LNG imports, companies are set to ramp up domestic production, fill up gas storage facilities and increase imports of cheaper pipeline gas from Russia and Central Asia.
“Our winter supply policy is stabilizing piped gas imports from Central Asia, boosting volumes from Russia and increasing domestic production,” Li Wei, a gas market executive with top state giant PetroChina, said.
The firm, the country’s largest gas producer and importer, has secured 109.5 billion cubic metres of supplies for this winter, including 59 bcm from domestic fields, Li said.
Li Wei predicted China’s winter gas use at a higher range of 187-190 bcm.
The supply pool of 109.5 bcm, which includes domestic production and imports, compared with 106.2 bcm the previous winter, representing a modest increase of 3%, down from 8% growth recorded in the 2021 winter over 2020.
Sinopec Replenishing Import Terminals
Zhao Kui, a gas marketing executive at Sinopec, said Sinopec is pumping at full capacity from its main fields – Yuanba and Puguang – in southwestern Sichuan basin after completing regular maintenance.
Sinopec is also replenishing LNG inventories at two large import terminals in Tianjin and Qingdao with storage levels at 80% or above by mid-November, Li added.
China has so far established gas storage capacity of 26 bcm, equivalent to 7% of total demand, to cope with peak winter heating demand, said Li Jianping, the CNOOC researcher.
Companies have also set up contingency plans to cut supplies to the so-called “disreputable users” – mostly industrial and commercial users – to prioritise residential consumers during cold spells, officials said.
- Reuters with additional editing by Jim Pollard
ALSO SEE:
China LNG Imports From US Plunge 95% Amid Ukraine War – WSJ
Blast at Freeport’s US LNG Terminal to Hit Asia Markets
Asia LNG Prices Rise as Japan, Korea, India Boost Stocks
