GGP: China LNG Forecast
The statements, opinions and data contained in the content published in Global Gas Perspectives are solely those of the individual authors and contributors and not of the publisher and the editor(s) of Natural Gas World.
This is an excerpt of a periodic thought-pieces about key issues in the LNG market by Tony Regan (DataFusion Associates) originally published in July 2017.
Chinese LNG imports over the first eight months of 2017 were 44% higher than the same period last year. Full year imports could exceed 34 million tonnes (26 million tonnes in 2016). In 2018 China is likely to overtake Korea to become the second largest LNG importer. How much will China import in 2025? Will it overtake Japan? This LNG Insights forecasts China’s LNG imports out to 2030.
Boom time
- • Domestic gas consumption over the first eight months of 2017 increased by 17.8% year-on-year to reach 150.4 Bcm
- • Domestic gas production up 10.8% to 97.8 Bcm
- • Natural gas imports Jan-Aug up 24.8% to 57 Bcm
- • LNG imports in first eight months up 44% year on year.
- • LNG sales within China surged by 45% year on year in H1 2017, to 8.11 million tonnes as a result of stronger demand from the transport and industrial sectors.
- • Transportation sector returns to growth – LNG significantly cheaper than diesel
- • Government outline substantial expansion of LNG terminal capacity, gas storage facilities and pipelines
- • Major coal to gas conversion programme launched to convert industrial boilers and district heating plants to gas in major cities. This campaign becomes the major driver in gas demand growth
Scene setter
The 13th Five-Year Plan for natural gas development (2016-2020) that was issued in January 2017 revised downward its estimates for gas demand in 2020, stating that gas will account for 8.3-10% of the energy mix. Officials acknowledged that their previous goal of 10%, which is estimated to translate to 350 Bcm, was overly ambitious. According to the new plan, Beijing aims to produce 207 Bcm of gas by 2020, including 120 Bcm of conventional gas, 30 Bcm of shale, 37 Bcm of tight gas and 16 Bcm of coal-bed methane, with an additional 10 Bcm unallocated.
A key objective in the five-year plan is the conversion of industrial boilers and district heating plants from coal to gas throughout four major urban areas: the greater Beijing region, northeast China, the Yangtze River Delta around Shanghai and the Pearl River Delta in Guangdong province. Local governments are supporting the efforts with measures including subsidized gas connections and boiler replacements.
The statements, opinions and data contained in the content published in Global Gas Perspectives are solely those of the individual authors and contributors and not of the publisher and the editor(s) of Natural Gas World.