The decline may also be a bargaining strategy employed by the Central Asian countries, as global oil prices are in a period of meltdown, which does not favor suppliers' interests, experts noted. Temporarily reducing supply may tilt the bargaining scale to the Central Asian side.
The CNPC was unprepared to handle such an unexpected and large-scale gas supply cut, despite an earlier meeting with the Central Asian countries in September, whereby all countries agreed to pump up the total daily supply to 130 million cubic meters during the winter season - but those gas producers failed to deliver.
The State-owned oil giant, which is commissioned by the Chinese government, also sent representatives to the three Central Asian countries in December to negotiate the matter.
After negotiation, natural gas supplies from the three nations surged.
In late December, a total of 110 million cubic meters of natural gas started being transmitted via the pipeline every day, but this amount was still "significantly lower" than the contracted 130 million cubic meters.
Switch to natural gas
In addition to the reduction in supply from foreign sources, China's push to combat air pollution is another reason behind the gas shortage, as authorities this year have ordered millions of households to convert from using coal for heating as well as companies to replace coal-fired plants with gas or electricity.
The campaign has in turn driven up the demand for natural gas at a faster-than-expected rate, even during the traditional weak demand season, although the country has already taken note of a potential demand increase and has been purchasing spot liquefied natural gas (LNG) since summer, according to Yao Qiang, a professor at Tsinghua University.
During the first 10 months of 2017, China's gas consumption jumped 18.7 percent year-on-year, which eclipsed 2016's whole-year growth rate of 6.6 percent, according to data from the National Energy Administration.
Now, that rate is estimated to reach 20 percent if the government does not impose a cap on natural gas usage.
"The year 2017 marks the latest year since a government curb on air pollution in 2013, when 10 measures were implemented. And as factories rushed to turn to natural gas to meet coal-cutting targets last year, the demand for natural gas thus remained robust the whole year, including during the summer season," Yao explained.
Despite an increase in both domestic output and imports, China was estimated to suffer a natural gas shortage of 10 billion cubic meters last year as the surge in demand in 2017 was "all-round," which not only refers to high demand from industries such as the chemical and electricity industries, but also from civilians, Yao was quoted as saying in the report.
To avoid such gas shortfalls in the future, experts have suggested that the country should diversify its sources of gas imports, while also scaling up investment in gas storage houses so that the substance can be imported at a relatively cheap price in low seasons and sold at a relatively high price when demand soars.
Li Yao, the CEO of consulting firm Siya Energy, said that the China-Russia gas pipeline, which is scheduled to go into operation at the end of 2019, may not be a viable supplement to the China-Central Asia pipeline due to difficulties in price negotiations and costs.
Li suggested that building coastal LNG terminals would be a better supplement, as they are more flexible for gas imports and more economically viable than gas pipelines in terms of transportation costs.
"In peak summer times, spot LNG could meet market demand. In winter seasons, the country's demand for natural gas could be met by domestic output, long-term pipeline imports as well as long-term LNG sales and purchase agreements," Yao noted.
