Gas Use Surging in China

China’s gas demand is booming, thanks to the increasing buying power of consumers along the affluent coastal areas. According to the National Development and Reform Commission, about 60 percent of China’s gas demand is from the eastern and southern provinces that include Guangdong and Fujian. The government has outlined a gas utilization policy, which gives priority to using gas in the residential sector. By 2020, the power generation and residential sectors are expected to consume more than 60 percent of China’s gas.

Rising coal prices are also pushing gas demand. As the price of coal gets closer to that of gas (on a Btu basis), buyers are opting for the cleaner fuel. Add in the pressure from the central government to cut emissions and the demand for gas becomes yet more obvious.
To meet demand, China will have to add proven gas reserves by 500 Bcm per year over the next five years, to ensure a domestic production capacity of 90 Bcm/year by 2010 and 150 Bcm/year by 2020. The looming gas shortfall will likely be met by imports of pipeline gas from central Asian countries, including Russia and Turkmenistan, and the country’s southern neighbor Myanmar. Additional LNG supplies will be shipped in from various suppliers.

Energy Tribune