Gas imports to rise by 19 percent

Safety inspectors check the pressure of a natural gas supply facility in Fuyang, Anhui province. China's natural gas use increased by 13.9 percent to 167.6 billion cubic meters last year. The amount is expected to hit 186 billion cu m this year.WANG BIAO / FOR CHINA DAILY

Demand grows due to battle against effects of higher levels of air pollution

China's dependency on imported natural gas is expected to surge almost 19 percent this year as the nation's battle against air pollution drives up demand for the clean-burning fuel.

The nation's reliance on overseas gas exceeded 30 percent for the first time last year, according to a report released by CNPC Economics and Technology Research Institute on Wednesday.

Dai Jiaquan, deputy head of the institute, estimated that China's GDP growth will be about 7.5 percent in 2014, which will mean a stable rate of expansion in energy use.

"The volume of imported gas experienced a marked increase last year, rising 25 percent to 53 billion cubic meters. Pipeline gas accounted for 52.8 percent or 28 billion cubic meters and liquefied natural gas accounted for the rest," said Duan Zhaofang, a natural gas expert at the institute.

The report estimated that China's gas imports will grow 18.9 percent this year to 63 billion cu m.

"Compared with the slight growth of 2.3 percent in global natural gas demand in 2013, China's gas demand has been increasing at a rapid pace, pushing the country to become the world's third-largest gas user," said Duan.

The nation's gas use increased 13.9 percent to 167.6 billion cu m last year, according to the report.

Duan estimated that gas consumption in 2014 will reach 186 billion cu m, which would be a rise of 11 percent.

"Notably, the percentage of natural gas consumption in the primary energy mixture grew from 5.4 percent in 2012 to 5.9 percent in 2013, as the country has been dealing with air pollution and accelerating the construction of coal gas projects to increase domestic gas production," said Duan.

She estimated that the proportion will rise in 2014 to 6.3 percent.

More Chinese cities are switching from coal to natural gas to fight smog.

The gas supply-demand gap, which has been widening in recent years, hit a record in 2013 at 22 billion cu m.

Wu Xinxiong, head of the National Energy Administration, said the government will strive to ease the shortfall this year by using multiple strategies.

He told the annual national energy work conference on Tuesday that unconventional natural gas development will assume a larger role in adding new gas supplies.

"By 2020, China's coal gas output will grow to more than 50 billion cu m, accounting for 12.5 percent of domestic natural gas production," said Wu.

Wu said the government will make greater efforts to build new gas storage facilities to achieve better control of gas utilization.

At least nine storage facilities were put into operation in 2013 with total capacity of 11.2 billion cu m, taking China's storage capacity to 15.9 billion cu m.

Several companies — including State-owned PetroChina Co Ltd and China Petrochemical Corp (Sinopec Group) — have gas storage projects on the drawing board, according to the report.

Duan said the investors in gas storage projects will become more diverse, as State capital, private and foreign investors all participate.

"Commercialized natural gas storage is in its infancy in China, but it will be more tightly regulated and diversified in the future," she said.

The report said China's natural gas storage capacity will exceed 30 billion cu m by 2020.

Including other means by which natural gas is stored, such as LNG, China's total natural gas storage will account for 10 percent of its annual consumption, which is the world standard.

In contrast to natural gas, the nation's oil use growth decelerated in 2013. Crude oil consumption was up 2.8 percent last year to 487 million metric tons. The growth rate was 1.7 percentage points lower than in 2012, according to the institute.

Imported oil accounted for 58.1 percent of the country's oil supply, said the report.

During the first decade of this century, China's oil consumption consistently rose, with average annual growth of 6.7 percent. That trend ended in 2011.