Rise of Unconventional Gas in China

China’s consumption of natural gas has doubled over the past five years, and IHS CERA projects that demand will quintuple over the next two decades. This trend seems to bode well for international gas producers. As a result, many gas-producing countries look to the Middle Kingdom as a promised land. But a wildcard could disrupt their vision of robust Chinese gas imports: China’s own unconventional gas, a resource that over the long term could put the squeeze on imports.

Natural gas has historically been a niche fuel in China. Even after recent rapid growth, it accounts for less than 4 percent of primary energy supply, compared to 25 percent in the U.S. Last year, China consumed 130 billion cubic meters (Bcm) of gas, roughly one fifth of U.S. consumption, despite China having a population four times larger. MORE