According to Reuters, China’s natural gas output rose in December to the highest monthly rate recorded since at least 2014. The main cause has been state energy firms making a concentrated push to fill the winter supply gap sparked by the nationwide drive to switch millions of households to gas from coal heating.
The National Statistics Bureau (NSB) reported that companies produced 13.6 billion m3 of gas in December, up from 12.6 billion m3 in November, pushing up output for the whole of 2017 by 8.5% to 147.4 billion m3. One company in particular, Beijing based Sinopec, saw significantly increased production in that it saw its 2017 gas output rise 19% over 2016 levels.
Furthermore, domestic wholesale prices for LNG – which are not regulated by the Chinese government – hit an all-time high in December (nearly US$1554/t in northern China). However, they have since dropped more than 40% thanks to the stronger domestic production, as well as record imports of both pipeline gas and LNG.
“With supplies catching up and industries set to slow down activities as the Lunar New Year break nears, the market shall be more balanced,” said a senior official with PetroChina.
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