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China to increase dependence on natural gas

LNG Industry,


Natural gas currently serves a small but increasing portion of China’s total energy demand, according to the US Energy Information Administration (EIA).

China relies heavily on domestic coal (and to a lesser extent oil) to meet rising energy consumption. To reduce air pollution and carbon dioxide emissions, the Chinese government is attempting to replace some of the country's coal and oil use with natural gas.


Source: US Energy Information Administration, IHS EDIN.

Energy consumption

Natural gas accounted for 4.9% of China's total energy consumption in 2012, however large investments in domestic natural gas production and infrastructure, combined with growing imports, are likely to support a significantly larger role in the future. The Chinese government anticipates increasing its natural gas share of total energy consumption to approximately 8% by the end of 2015 and 10% by 2020.

China has more than tripled natural gas production since 2003, producing 3.8 trillion ft3 in 2012, and the government is targeting production to reach approximately 5.5 trillion ft3 of natural gas per year by the end of 2015. Most of the anticipated production growth is from large onshore fields in the western and north central regions of China as well as from the offshore deepwater regions in the South China Sea.

LNG imports

China's natural gas consumption has outstripped domestic supply since 2007, resulting in rising imports of both LNG and pipeline gas. China's natural gas consumption rose at an average annual rate of 17% from 2003 through 2013, reaching almost 5.7 trillion ft3 in 2013.

In 2013, China imported just under 1.8 trillion ft3 of LNG and pipeline gas to fill the growing gap between supply and demand. Imported natural gas met 32% of China's demand in 2013, up from 2% in 2006. The country is rapidly developing its LNG import capacity in the urban coastal areas and currently has 10 major regasification terminals with 1.7 trillion ft3 per annum of capacity.

Japan and South Korea

In 2012, China rose to become the third-largest LNG importer in the world, after Japan and South Korea, and in 2013, the country imported 870 billion ft3 of LNG. Estimates for the first half of 2014 show LNG imports growing at faster levels than in previous years.


Graph of China's natural gas imports by source, as explained in the article text.
Source: US Energy Information Administration, International Energy Statistics.


Source: US Energy Information Administration.

Edited by Katie Woodward

Read the article online at: https://www.lngindustry.com/liquid-natural-gas/18082014/china-to-add-lng-capacity-to-energy-consumption-1229/


 

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