China to retrieve more natural gas

China's output of natural gas is expected to increase by 11 percent in 2012 to reach 113 billion cubic meters, the China Petroleum and Chemical Industry Federation said on Wednesday.

The country is expected to use more than 200 million tons of crude oil, an increase of 1.5 percent from the year before. And it is expected to produce about 280 million tons of diesel fuel and gasoline, an increase of 5 percent, the federation said.

Buoyed by strong domestic demand, the country's apparent consumption of crude oil - which includes domestic output and imports but excludes exports - is expected to amount to 480 million tons this year. That will be an increase of 5.3 percent from the year before.

The demand for natural gas will call for the use of 148.2 billion cu m of the fuel, an increase of 15.3 percent from a year ago, the China Petroleum and Chemical Industry Federation said.

The apparent consumption of crude oil is expected to increase by an average of 5 percent during each year of the 12th Five-Year Plan (2011-15). And the amount of natural gas used is expected to increase by an average of 19.4 percent a year during that time, said Li Shousheng, executive vice-president of the petroleum and chemical industry federation.

On Tuesday, figures from China's customs authority showed that China's economic slowdown dragged the growth rate for its crude oil imports to 6 percent in 2011. The year before, that rate had been 17.5 percent.

An official figure has yet to be released for the growth of China's gross domestic product (GDP) in 2011. Many observers, though, expect the figure to show the economy grew by 9.2 percent that year. This year, the growth rate is expected to further fall to about 8.5 percent.

The China Petroleum and Chemical Industry Federation said the amount of China's refining capacity reached 590 million tons in 2011, an increase of 6.9 percent from the year before. The strict controls the government has placed on diesel fuel and gasoline prices are believed by many to have caused the country's petroleum-processing industry to lose 4.98 billion yuan (US$788.6 million) from January to October in 2011.

The federation said the apparent consumption of diesel fuel and gasoline is expected to increase by 5.8 percent, hitting 280 million tons this year.

The domestic industry has overcapacity, Li said, adding that the country will continue to consolidate domestic refineries and close down small refineries that are inefficient and have slim capacities, he said.

Liu Tienan, director of the National Energy Administration, said at the National Energy Work Conference in Beijing on Tuesday that China plans to establish a system to curb domestic energy use and that the country's ultimate goal is to reduce emissions.

Liu also said investments in natural gas - unconventional gas in particular - are expected to increase greatly during the period of the 12th Five-Year Plan.