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Beijing orders regions to 'regulate' gas market as prices soar

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LNG Industry,

Reuters are reporting that China’s state planner has ordered eight regions to meet with natural gas producers, LNG terminal operators and traders on 4 December to ‘regulate’ the market as prices of the clean fuel soar due to winter heating demand.

The meetings highlight Beijing’s concerns about rising gas prices amid its policy to shift millions of homes to gas heating from coal for the winter along with thousands of factories and businesses to combat air pollution. Last week, the industrial provinces of Hebei and Shandong warned of gas shortages and ordered cuts to some industrial and commercial users.

The meetings should warn the market participants that the government will punish any companies found to be involved in manipulating prices or monopolising the market.

The eight regions include top natural gas producing regions Shaanxi, Inner Mongolia, Xinjiang and Sichuan and major gas consuming regions such as Hebei, Jiangsu, Liaoning and Beijing.

Wholesale prices of LNG ex-factory in Inner Mongolia were as high as 7750 yuan per t and 8050 yuan per t in Shanxi on 4 December, up from around 7200 yuan a week ago.

Domestic prices hit their highest since at least 2011 last week.

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